Rock against WorkChoices

Some of our more impatient bosses have moved fast to take advantage of the additional power given to them by WorkChoices, and it’s encouraging to see lots of signs that workers are fighting back. Along with marches and job actions, music has always been part of such protests, and the ASU is putting on a Rock for Your RIghts at Work event at the Zoo in Ann St., Brisbane on 6 April

(via Mark Bahnisch

143 thoughts on “Rock against WorkChoices

  1. Steve at the pub, they’re good perspectives too. My main point was that it’s silly for employer interests to use state intervention as a differentiator in their attack on worker rights legislation.

    Personally I’m a big fan of small business and see it facing many of the same problems as workers. A special interest of mine is the problems farmers face in dealing with corporate power.

    If small business looked more closely at Work Choices, it would see that this type of legislation favours big business, not small. By making workers cheaper and more disposable, it helps larger interests compete against more knowledgeable and more hard working small firms and contractors.

    Re debt collection, surely you could use one of the debt collection firms? And as to personal experience, I’ve had the experience of chasing debts from the big boys.

  2. I’m afraid I haven’t investigated workchoices any further than notice the unfair dismissal has been scrapped.

    This is the best news I have heard in ages. I cannot think of a redeeming feature of the unfair dismissal laws. Their removal is good for all concerned. *yippee*

  3. SATP says pretty much everything I would have said against Tony Healy’s points, although I would add a generic statement that commercial litigation is almost never an option for small businesses, given that a protracted dispute can easily cost more than $100,000 in legal bills and be a huge distraction. Beyond setting the rules and providing the umpires, the state does very little to help you out: private property protection is mostly a privately funded affair (as it should be).

    That’s why you don’t see small business owners clogging up the courts. At the end of the day, if someone won’t pay there’s not much you can do but suck-it-up. A debt collection agency can’t force them to pay – only a court order (with the threat of jail for non-compliance) can do that.

    By making workers cheaper and more disposable, it helps larger interests compete against more knowledgeable and more hard working small firms and contractors.

    I don’t follow this argument. I doubt most workers are going to get cheaper in the current market, and the greater “disposability” only favours small business (wrongful dismissal has only been scrapped for businesses with less than 100 employees).

    It is true that big business will gain a practical advantage from some of the union-busting provisions, since big businesses will more easily be able to unshackle themselves from standover union tactics, and big businesses are much more likely to be unionized in the first place. But I doubt that’s going to make much difference to the small businesses.

  4. I think we have to wake up to the realities of today, Tony. Most people, at least most people in the US, are owners as well as workers. How many of us do not own stock these days in public companies? Either directly or through mutual funds. Long gone are the days when one is either a worker or an owner; we’re often both.

    We have plenty of examples of what works where. In France and Germany, with strong unions and “worker” protections, you have corresponding high unemployment, low ownership of the means of production and general malaise in the business sector.

    Compare that to Britain and the US, where you have weaker unions, fewer “worker” protections, low unemployment, high levels of stock ownership and vibrant business sectors. It’s well past time to recognize that what works in practice also works in theory.

  5. Avaroo,

    1) “if you own the company, you get to be as stupid as you want to be.� Is this the reason why some people prefer a legal system where owners of a company and have unrestricted rights to hire and fire?

    2) The beauty of your preferred scheme is that the managers of corporations may be able to get a little bit of wealth from those whom you refer to as ‘we’ in wages and in profits. And, if ‘caught by the debtholders’, a little bit of taxpayers money is appropriated too. Happy to hear you understand all this.

  6. “Is this the reason why some people prefer a legal system where owners of a company and have unrestricted rights to hire and fire?”

    no

    “2) The beauty of your preferred scheme”

    Low unemployment, ease in finding a job, vibrant economy?

    “is that the managers of corporations may be able to get a little bit of wealth from those whom you refer to as ‘we’ in wages and in profits.”

    ah, us vs them, the siren song of those still living in 1850.

    “And, if ‘caught by the debtholders’, a little bit of taxpayers money is appropriated too. ”

    Yes, companies NEVER go out of business, right.

  7. The rights of property and the rights of labour are central to the ways in which societies define themselves as civil societies. These social practices define more powerfully than any other form and structure of everyday life.

    The law can say whatever the lawmakers want it to say about the rights of labour and the rights of property.

    It is a fact beyond dispute that there is no wide consensus in the Australian community about what that law should say about the IR practices imposed by Howard’s IR legislation.

    Any law makes no concession to the fact that there is widespead disagreement about the rights of property and the rights of labour is an unsustainable law.

    I believe that Howard’s IR changes are an example of unsustainable law similar to Thatcher’s poll tax disaster in the late 1980s. Thatcher seemed unassailable until she exposed herself as an unapologetic supporter of the rights of property. Her own party, fearing an electoral holocaust, dumped her. The poll tax was repealed by a thoroughly cowed Tory Party, who haven’t been heard of since.

    Assuming Australia continues to adhere to the principle of majority rule, the Coalition will be punished severely for supporting Howard’s IR changes.

  8. “casual is only suitable for certain jobs in certain kinds of industries (those where demand is intrinsically variable). Contractors are useful to service short-term demand spikes for commoditized tasks, but if the job requires a lot of training specific to the role then it is not so easy to do that with contractors – you need to train and retain employees.”

    But why can’t you do that with employees on contract or on casual conditions? My workplace is majority contractors and the level of training specific to the role is enormous. People aren’t really productive until they have been there a few months. There are other contractors that have been around for more than 5 years. And its not about the annual leave and things like that, as alot of the contracts have those written in just like a normal employee.

  9. Even if it is accepted that the right to fire at will will have a business advantage – it has the potential to be so abused tht those rights which are protected will never have to be discussed. For instance the ability to discriminate against people on notions of race, sex, religion etc will never be tested as employers don’t have to state their reasons.

    The power that this confers means that there will be a race to the bottom. There are good employers who will be forced to reduce wages, conditions etc to stay in business. The values that they hold to treat people fairly will be trashed in the process.

    The problem with the discussions above is that we need to believe that good employers will continue to behave in ethical ways – whereas history shows that even people who hold ethical values can be brought to a point where they behave badly.

    Women will be badly affected as their bargaining power is reduced by the potential to have children and to care for children and elderly parents. When bargaining power is reduced and there are no protections then it follows that wages and conditions will be reduced. This is good for employers who have wages as a major cost. It is not good for the women who are looking to have work which allows them to have a family and pay the bills.

    Coincidentally on July 1 Sole Parent Pensioners will be required to enter the labor market – these are manly women. What good planning on the part of the government. To increase labour supply at the same time as the new NoWorkChoice legislation will be running strongly – and anyone who refuses to take a job no matter how badly paid will not be entitled to benefits.

    No wonder employers are feeling happy.

  10. How could any employer ever be “forced to reduce wages”?

    “Women will be badly affected as their bargaining power is reduced by the potential to have children and to care for children and elderly parents.”

    Millions of women work in jobs all across the US. How is this possible with no “worker” protections? And why would it be any different for women in Australia?

  11. Avaroo: “How could any employer ever be ‘forced to reduce wages?'”

    Well not literally forced perhaps, but forced if you want to stay in business. I co-run a small business. We compete primarily with a much larger business. Our advantages are lower (management) costs and specialty skills in a niche market. Their’s are a name established from working over a much larger market and a marketting budget that dwarfes ours.

    We try to adhere to a philosophy of paying our staff a liveable wage for the period they are working for us (because our work is seasonal we can’t pay people a living wage year round). Our competitor pays the lowest rate they legally can.

    Up til now we have been able to pay our staff more, but through greater efficiency we usually underbid the competitor when tendering for jobs. I expect that under the new legislation they will pay their staff even less. The question for us is whether we can continue to underbid them, or whether we will have to start paying our staff less as well, which we don’t want to do.

    BTW, the whole notion that bad companies will be driven from the market looks a bit of a joke to us. We frequently hear horror stories from clients who used to use our competitor about how much worse a job they did, but they continue to have a much larger share of the market than us – the inertia provided by thier size, capital, marketing budget etc means that they sometimes get jobs when charging up to 40% more than us, even though they have a much longer list of disastisfied ex-customers.

    PS – I’m only speaking for myself and two of my partners here. The fourth partner has a somewhat different view.

  12. He who writes a paycheque is compelled by law to continue to write the same cheque each week forever? What a ridiculous law!

    How many of those who are mourning the demise of this law have ever walked the walk & had a permenant employee? A dose of reality usually changes ill-formed opinions.

  13. Stop the rubbish, to make that statement with any accuracy, you could only be looking into a mirror.

    I am guilty of not having a jealous union mindset. I am guilty of not being a soft handed left winger (as opposed to those who have got their hands dirty and had blisters from working for a boss)

    After many years of living with, and adhering to, the unfair dismissal laws, I do not see any benefit in them for anybody.

  14. SATP says: I am guilty of not being a soft handed left winger (as opposed to those who have got their hands dirty and had blisters from working for a boss)

    Anymore cliches? I am a left winger who is very familiar with dirty hands and blisters, and oven-like roof spaces, and diggin ditches in tropical sun, etc. Done plenty of that. Didn’t complain either. (Didn’t love it either.)

    I agree with you that the unfair dimissal laws at least needed serious reform, but having been on the receiving end of incompetent, arrogant abusive bosses more than once on my life, I think some version of unfair dismissal has a place. Though I agree with whoever it was that made the point about unfair resignation.

    Abuse, incompetence, dishonesty and sloth are found everywhere in society. Which is the point, workers don’t have a strangle hold on it. And the market often doesn’t always really hold bosses/owners to account, sometimes it even rewards them, especially at the big end of town. Hence the need for a bit of civilising regulatory oversight and restraint.

    And bosses are also sponging hypocritical whingers just as often as workers. It’s a human thing, not a worker/unions v. bosses/owners thing.

  15. ‘Millions of women work in jobs all across the USA.’ What for? Three bucks an hour plus tips? Sorry, it’s illegal to discuss wages and/or conditions now (breach of contract)

  16. “Millions of women work in jobs all across the USA.’ What for? Three bucks an hour plus tips?”

    Yes, every American woman works for $3 an hour plus tips.

  17. “We try to adhere to a philosophy of paying our staff a liveable wage for the period they are working for us (because our work is seasonal we can’t pay people a living wage year round). Our competitor pays the lowest rate they legally can.”

    And yet they continue to be able to find people to work for them?

    There’s nothing preventing you from paying your employees whatever you want to pay them, no matter how many times more it is than your competitors pay. Now if you want to stay in business and win contracts, then you’ll likely either have to eat the excess wages yourself or pay people less, but it’s still your choice. No one is forcing you to pay less.

    Your notion that you must pay your employees more than the going rate for the job is as silly as saying that whoever you are providing a bid to for a job should select your compay even though it’s not the low bidder. That you appear to understand would be a poor business decision on their part. Yet you don’t make the connection to your OWN business decisions.

  18. avaroo, surely that’s the point? If legislation lets employers reduce wages, then those who do will be able to drop their prices and win more business at the cost of employers who might wish to pay better wages.

    Thus legislation like the IR changes actually deprives employers of the choice to continue paying fair wages, all things being equal.

  19. By the way, Howard and Andrews are all over the papers today in damage control mode.

  20. “avaroo, surely that’s the point? If legislation lets employers reduce wages, then those who do will be able to drop their prices and win more business at the cost of employers who might wish to pay better wages.”

    And if everyone reduces wages across the board, then prices come down too, meaning that purchasing power doesn’t change, and people are no better or worse off.

    ” For instance the ability to discriminate against people on notions of race, sex, religion etc will never be tested as employers don’t have to state their reasons”

    You assume that unfair dismissal laws help minorities for some reason. I am not sure why.

    You don’t have to give a reason why you hired somebody. Why would you hire a minority or a woman when you know full well that sacking them could cause you to be taken to court for discrimination?

    The safe course would be to never hire anyone except straight white males, because as they cannot be the victim of “discrimination” of any kind, that at least eliminates one way that you could be stitched up at later date.

    You also won’t have any problems with sexual harassment laws if you only ever hire men.

    The sad thing is that these sorts of regulations which are supposed to help people end up hurting them instead.

    “Women will be badly affected as their bargaining power is reduced by the potential to have children and to care for children and elderly parents.”

    Again, you have it exactly backwards. Women are hurt by the current regime, especially young women in relationships who are considered a risk to have children in the near future.

    Why take a risk on hiring her knowing if that she gets pregnant and can’t work for 6 months, not only can you not fire her but will be responsible for paying her to take an extended leave of absence?

    With the removal of unfair dismissal laws, employers will again have the confidence to employ women without having to worry if they will become a future financial burden.

  21. Avaroo, the point is that equilibria (solutions) of economic systems depend on the institutional framework (rules of the game) and the solutions have different properties. For example, it is possible that under some ‘rules of the game’ everybody is worse off. Your apparent mental model (consisting possibly a list of statements to be published again and again all over the cyber space without regard as to the negative externality created in the form of unbelievable bordom generated in the minds of the readers) does ot seem to allow for this.

  22. Yobbo,

    1. “With the removal of unfair dismissal laws, employers will again have the confidence to employ women without having to worry if they will become a future financial burden.”

    Which golden age of sexual equality in the workplace are you referring to here?

    2. “And if everyone reduces wages across the board, then prices come down too, meaning that purchasing power doesn’t change, and people are no better or worse off.”

    This is called debt deflation. Try telling Howard’s “battlers” that they’ll be paying their pre-WorkChoices’ debts with post WorkChoices incomes. Given the fact that Australians are the world-champion debtors, this confrontation between rhetoric and reality is bound to be a very explosive one.

  23. Yobbo, its also entirely possible for wages to come down a lot faster (or rise more slowly) than prices. This happens if most of the falling costs are swallowed in profits (in a business to business transaction this could be the profits of the contractor or the contractee or both). The result is that those who own shares in businesses become richer, while those who live on wages become poorer. This has been going on (at least relatively speaking) for decades in the US.

    As someone who gets almost half their income from the company I run, and a little more than half from working for other people in our off season, I’ll probably come out about equal if this is the way things go. But it makes for a society I don’t really want to be part of.

  24. I presume somebody has already said… but just in case: people get fired all the time. Just because these people were fired after the new laws came in didn’t mean they weren’t going to be fired anyway.

    Further, just because some people got fired doesn’t mean that the laws are bad for total employment.

    The real test of these laws isn’t in whether 10 people got sacked yesterday… it’s in the long-term consequences. Sackings are always big news, but the slow constant process of job creation never makes the front page. This news-bias might help lefties to get angry, but it is the total story that matters to the unemployed.

  25. The real issues of the day are highlighted in the Australian today – inadvertently Rupert has informed the great unwashed:

    (1) On the front page – hidden inside another story – “16% of all Australian men in the age group – 25 to 44 – are unemployed or not in the labour force”. Isn’t this of concern to anyone? Apparently not.

    (2) According to the latest NEWSPOLL, John Howard has a SATISFIED rating of 48% and a DISSATISFIED rating of 43% in NSW. Here we have the current Prime Minister – the one who is regularly taking the official Opposition party to the cleaners – and who is supposedly invincible – getting a dissatisfied rating of 43% in our most populous state! Doesn’t this say something about how he dominates the political landscape? In his dreams.

  26. John Humphreys,

    Indeed, the real questions are:
    What is the theoretical and empirical foundation of the IR laws?
    Who were the advisers?
    Are the advisers going to take the financial responsibility for the private and social costs?

    None of the foregoing questions have anything to do with ‘lefties’, ‘righties’, ‘uppies’, or ‘downies’.

  27. “avaroo, surely that’s the point? If legislation lets employers reduce wages, then those who do will be able to drop their prices and win more business at the cost of employers who might wish to pay better wages.”

    Ys, there are no guarantees that you’ll win business. Ever. That’s life. Still, my point was, you may continue to pay your employees whatever wages you’d like. No one, and no law, is “forcing” you to lower anyone’s wages.

  28. “”The result is that those who own shares in businesses become richer, while those who live on wages become poorer. This has been going on (at least relatively speaking) for decades in the US.”

    Most Americans own shares in businesses either directly or through mutual funds/retirement plans. Is stock ownership that much of a rarity in Australia that one is either an owner or a “worker” and never both?

  29. Ernie… I don’t think it matters who the advisors are as much as what the advice is. The theoretical foundation for more flexible IR laws is beyond doubt, except in the more ideological circles of the left.

    Denying the effectiveness of flexible labour markets is up there with young-earth creationism, believing the US government about Iraq and denying global warming.

  30. John Humphreys, are you, as a libertarian, comfortable with the government forbidding employers from deciding how they will employ people?

    And with the government forbidding people from deciding to negotiate their working arrangements jointly, or seeking appropriate professional representation?

    And to top it off, with the government imposing $33,000 fines for even trying to include certain types of arrangements in contracts?

  31. John Humphreys

    Please do provide at least one reference for the theoretical foundation for “flexible IR laws”.

    Are you saying that in practice you want IR laws to be bent – forward, backward, sideways – to achieve ‘flexibility’?? Surely, for that purpose any arbitrarily chosen set of laws would be ‘good enough’. So, why do you bother to advocate a particular set of laws that are to be bent?

    “Denying the effectiveness of flexible labour markets is up there with young-earth creationism, believing the US government about Iraq and denying global warming.”

    Sure, ‘everything’ is “effective” in one way or another. Hence any arbitrarily chosen IR laws would do. I suppose you know where “up there” is where one can find young-earth creationism, etc. I have no idea where such a place is.

    What are “more ideological circles of the left”??

  32. John Humphreys, are you, as a libertarian, comfortable with the government forbidding employers from deciding how they will employ people?

    This is a very good question, so I’d like to hijack it for myself (as something of a libertarian).

    Governments already forbid certain kinds of owner behaviour in order to ensure greater efficiency and fairness in the market. For example, anti-cartel laws – I am not allowed to collude with my competitors to set prices.

    To a certain extent the prohibitions in workchoices on employee/union bargaining behaviour can be viewed as cartel-busting but on the labour-supply side. These should also result in a better operation of the market. Why should labour be allowed to form cartels but employers not?

    [I understand that once-upon-a-time labour cartels were the only way for workers to force change. But we’re in the 21st century now. In addtion to far greater class mobility, we also have an enormous state welfare apparatus ensuring no worker is 100% beholden to their employer anymore.]

  33. avaroo, on the subject of this legislation forcing fair paying employers into a race to the bottom, observe the comments by a partner of one of the law firms that helped draft the law, reported in The Australian today:

    Anthony Longland, a partner with Freehills, advised employers to watch for competitors who abolished penalty rates and allowances and eased restrictions on working hours.

    “They might be able to get a significant advantage over you in terms of labour costs,” he told a Sydney legal conference.

    Mr Longland was reported as saying protected conditions for workers were really “smoke and mirrors”. They were “protected but not protected” because the safety measures could be forgone if they were overridden.

    Mr Combet said Freehills had kept a “to-do list” so it could help the Government close off a range of protections in the laws.

    http://www.theaustralian.news.com.au/common/story_page/0,5744,18703103%255E2702,00.html

  34. Tony, nothing in that quote or link shows that any employer is “forced” to pay anyone less. Legally, you may pay people as much as you like.

  35. Avaroo: “most Americans own shares in businesses either directly or through mutual funds/retirement plans. Is stock ownership that much of a rarity in Australia that one is either an owner or a “workerâ€? and never both?”

    True, but not all that relevant. If someone draws 95% of their income from their wage and 5% from dividends and capital gains in companies they will be seriously disadvantaged if profits rise and wages fall. The vast majority of Australians are in approximately this position – much fuss is made over the proportion that own shares, but for most their holdings are so small as to be a truly minor factor. Owning $1000 worth of Telstra shares does not make one a major benificiary of a rising stockmarket.

    Obviously Avaroo also takes a narrow definition of the word forced – apparently it means “must comply or will face legal consequences”, rather than “must comply or will go out of business”. Most people would believe the word was applicable in either circumstance, but maybe that is evidence of decline of the English usage.

  36. “[I understand that once-upon-a-time labour cartels were the only way for workers to force change. But we’re in the 21st century now. In addtion to far greater class mobility, we also have an enormous state welfare apparatus ensuring no worker is 100% beholden to their employer anymore.]”

    Very big of you to acknowledge these things Dogz.

    Let’s let the dogs loose on your concessions and see where they lead us.

    1. In the egalitarian meritocracy of the 21st-century Australia of your imagination, what is the relevance of class? How do you identify class in a meritocracy?

    2. Further, if there are no classes how can there be class mobility?

    3. On the other hand, if classes still exist, then there must be class interests. A free society would maximise the scope of the expression of legitimate interests, including class interests. But as it has been widely acknowledged, Howard’s IR changes represent government dirigisme and social engineering in that they are designed to undermine class interests.

    4. And still virtually unacknowledged in our discussions is the long-standing defence of the rights of labour. One of the most potent elements of that debate since before the Industrial Revolution is wage-earners’ objection to having their labour and expertise regarded as indistinguishable in quality to finance capital. The workplace has always been viewed as an extension of the community and culture of workers. And workers have very often defended this aspect of the shop floor.

    Now this this last fact may be deplorable to meritocrats and libertarians such as myself. But as a political and social reality it cannot be wished away. There are many examples in the history of IR that demonstrate that to mishandle this issue is to buttress the determination of workers to defend their view of workplace culture.

    Howard’s IR changes have done just that.

  37. Obviously Avaroo also takes a narrow definition of the word forced

    Many arguements are semantic. ie futile.

  38. “True, but not all that relevant. ”

    Actually, it’s the whole point. It’s living in the past to suggest that people are either owners or workers. At least in the US, Australia may very well be different.

    “Obviously Avaroo also takes a narrow definition of the word forced”

    We’re talking about the law here, are we not? WorkChoices and it’s likely effect? There’s not a thing in WorkChoice, as far as I can tell, that would force anyone to reduce any employees wages. If there is such a provision in the law, let’s see it.

  39. Here’s what Tony had to say:

    “avaroo, on the subject of this legislation forcing fair paying employers into a race to the bottom”

    Is he NOT talking about being forced in connection to this legislation?

  40. StephenL:

    The vast majority of Australians are in approximately this position – much fuss is made over the proportion that own shares, but for most their holdings are so small as to be a truly minor factor. Owning $1000 worth of Telstra shares does not make one a major benificiary of a rising stockmarket.

    Every working Australian has super. Average weekly earnings is now around $50,000 (?). 9% of $50,000 is $4,500 per year. Therefore every working Australian is, on average, putting away $4,500 per year into their super. Every (public) super fund is invested in the stockmarket. Ergo, nearly every working Australian has an awful lot more than $1000 invested in the stockmarket.

    Then there’s property investments.

    Whichever way you cut it, we’re an ownership society.

  41. avaroo, I think you’re pushing it a bit. Forcing doesn’t mean compelling by legislation unless it’s qualified to convey that meaning. Especially in business, forcing often means compelling by financial or other reasons.

    But what do you think of this problem? If market conditions force employers to reduce pay generally as a result of this legislation, do you think that’s good?

    yobbo, this gets back to your point too, made earlier. If wages get pushed down, the full discount is never returned to consumers, so the effect is to exacerbate gaps in society.

  42. “Whichever way you cut it, we’re an ownership society”

    Dogz, this cannot be gainsaid.

    However, before we take to beat our collective chests too robustly, it is important to acknowledge that, at least since the first decade of the 20th century, this has always been the case.

    Home ownership has always been the major repository of equity in for Australians.

    Moreover, the old mutual provident societies like AMP and The Australian Natives Association provided investment opportunities to huge numbers of Australians. These funds were also largely invested in real estate. Thus, your mental picture of an erstwhile proletarianised Australia is incorrect. (For more on this see my previous post, which had been automoderated into invisibility).

    And two further points need to be made:

    1. Australia’s identity as an ownership society followed the establishment of a highly prescriptive arbitration system that set minimum wages on the principle of “fairness”. Just how much of an ownership society would Australia be without that juridical intervention?

    2. Australia is no longer a thrift society. A rising proportion of Australians’ equity guarantees burgeoning debt. There’s nothing wrong with this until income falls below the point at which the debt can be serviced.

  43. Hm. The superannuation enduced ‘ownership’ happens to be compulsory.

  44. Every working Australian does not have super, or at least not super equal to 9%. If you earn less than $400 per month from a particular employer they do not need to pay you super. I know this because one of my employers very carefully only pays me super in the months where I do more than $400 worth of work. The calculation (at least at this employer) is based on when I am paid, not when I did the work. Consequently it is sometimes in my interests to delay a pay request so that it counts in a month when I will earn over $400.

    An increasing number of people work several low paying jobs, and it is quite possible for some or all of these to be below $400 a month much of the time. That is of course besides the people in contract jobs who don’t always get paid super either.

    It’s true that there are few people who are purely owners or purely workers. However, for most people one dominates the other, and their interests are not evenly divided.

  45. Katz, StephenL, you’re moving the goalposts. I was addressing this specific point:

    much fuss is made over the proportion that own shares, but for most their holdings are so small as to be a truly minor factor. Owning $1000 worth of Telstra shares does not make one a major benificiary of a rising stockmarket.

    This is simply not true anymore. Most younger Australian workers will retire with somewhere between 7 and 10 times their final annual salary in equities, in addition to owning their own homes (prudence suggests that over the final 5-10 years of their working lives they will have actually shifted their super holdings from equities to less volatile securities, but given the lower returns of the latter, most of their gains will still have come from the stockmarket).

    These days life seems to be very roughly divided into thirds: one third getting an education, one third working, and one third in retirement. Most people earn nothing in the course of getting their education, so the amount accumulated for retirement during the middle third is just as important as the amount spent in the middle third.

    In other words, very roughly speaking, investment returns are now almost as important as income for most Australians.

    This is the radical difference between today and even 50 years ago: back then a male was expected to live no more than a few years into his retirement, hence it mattered little what investments he accumulated during his working years.

  46. Making it illegal to define certain provisions in an individual contract makes no economic sense. If you have employees who are risk averse (to unemployment), it might be cheaper to include unfair dismissal rules in an AWA rather than pay the employees their risk premia to offset the uncertainty.

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