Austerity Will Make WA's Economic Challenges Even Worse

Western Australia’s recent budget deficit is the result – not the cause – of deteriorating economic conditions. And contrary to calls for fiscal austerity and public sector downsizing, being made in response to the emergence of fiscal deficits in WA, the report showed that budget deficits played a useful role in stabilizing the economy during times of economic downturn, and will automatically recede as the economy recovers.

That is the message of a new report on WA's fiscal choices, by Dr. Cameron Murray and Troy Henderson, published by the Centre for Future Work.

“In reality there should be no alarm about the WA state deficit. Deficits are acceptable, and positive, during periods of weak economic growth.” says the Australia Institute’s Senior Economist, Dr. Cameron Murray.

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Rebuilding the NSW Workers Compensation System

Workers compensation benefits in New South Wales were dramatically reduced in 2012 by a newly-elected state government, citing an alleged financial crisis in the system.  Benefit payments (adjusted for inflation) declined 25 percent in just five years – and some cuts are still being imposed on injured workers and their families (including some losing benefits entirely).  But even as injured workers suffered the consequences of these benefit cuts, the financial position of the workers compensation system suddenly transformed from “famine to feast”: the supposedly dire deficit which justified the cutbacks disappeared entirely within one year, and by mid-2013 the fund was already back in surplus.  The system’s total surplus now exceeds $4 billion.

This report reveals the artificial nature of the supposed crisis which justified the 2012 cuts, and highlights the continuing positive financial trends that are generating ever larger surpluses.  It proposes a five-year timetable for restoring benefits to injured workers in NSW, without increasing average premium levels or incurring funding deficits.

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Portable Training System Would Help to Address Staff Crisis in NDIS Services

A new proposal for a portable training system for disability support workers under the NDIS would help to ensure the program achieves its goal of delivering high-quality, individualised services to people with disabilities. The proposal is developed in a new report from the Centre for Future Work.

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Wages Crisis Has Obvious Solutions

Mainstream economists and conservative political leaders profess “surprise” at the historically slow pace of wage growth in Australia’s labour market. They claim that wages will start growing faster soon, in response to the normal “laws of supply and demand.”  This view ignores the importance of institutional and regulatory factors in determining wages and income distribution.  In fact, given the systematic efforts in recent decades to weaken wage-setting institutions (including minimum wages, the awards system, and collective bargaining), it is no surprise at all that wages have slowed to a crawl.  And the solutions to the problem are equally obvious: rebuild the power of those institutions, to support workers in winning a better share of the economic pie they produce.

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The Difference Between Trade and 'Free Trade'

U.S. President Donald Trump’s recent trade policies (including tariffs on steel and aluminium that could affect Australian exports) have raised fears of a worldwide slide into protectionism and trade conflict.  Trump’s approach has been widely and legitimately criticised.  But his argument that many U.S. workers have been hurt by the operation of current free trade agreements is legitimate; conventional economic claims that free trade benefits everyone who participates in it, have been discredited by the reality of large trade imbalances, deindustrialization, and displacement.

Can progressives respond to the real harm being done by current trade rules, without endorsing Trump-like actions – which will almost certainly hurt U.S. workers more than they will help?  Centre for Future Work Director Jim Stanford has proposed several key principles to guide a progressive vision of international trade: one that would capture the potential benefits of greater trade in goods and services, while managing the downsides (instead of denying that there are any downsides).

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From Consensus to Action: Report from the First National Manufacturing Summit

The first National Manufacturing Summit was held at Australian Parliament House, Canberra, in June 2017, organised by the Centre for Future Work and the Australia Institute. The event was attended by over 100 delegates from the full range of stakeholders concerned with the future of Australia’s manufacturing sector: including businesses, industry peak bodies, trade unions, government departments, academic institutions and vocational training providers, and other civic organisations.

This report, prepared by Dr. Tom Barnes from Australian Catholic University, summarises the key findings of the day, including areas of strong consensus among the stakeholders represented, as well as priorities for further policy research.  Download Dr. Barnes' complete report here: From Consensus to Action.

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Innovation or Exploitation? Simulating Net Hourly Incomes of UberX Drivers

Uber's rapid growth in point-to-point transportation services has become the most potent symbol of the growth of the so-called "gig economy": where people perform work on an irregular, on-demand basis, paid by the task, and without the stability or security of traditional paid employment. The expansion of this model has raised concerns regarding the erosion of labour standards and entitlements (including minimum wages, paid leave, and superannuation). This report simulates the net hourly incomes received by UberX drivers in six Australian cities, and finds that they almost certainly earn much less than would be required under relevant minimum wage standards.

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The Future of Work in Transportation

Workers in all parts of the economy are confronting twin threats from accelerating changes in technology and automation, and the ongoing shift toward more precarious and irregular forms of work -- including "gigs" on digital platforms.  The transportation sector is widely acknowledged to be one of the most susceptible to both of these trends.  The Centre for Future Work has published a major new research report on these trends, and how sector stakeholders can best prepare for the coming changes.

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Senate Inquiry on the Future of Work, and the Future of Workers

In October the Senate of Australia launched an important new inquiry into the Future of Work and the Future of Workers.  The terms of reference for the inquiry include:

  1. "The future earnings, job security, employment status and working patterns of Australians;
  2. The different impact of that change on Australians, particularly on regional Australians, depending on their demographic and geographic characteristics;
  3. The wider effects of that change on inequality, the economy, government and society;
  4. The adequacy of Australia’s laws, including industrial relations laws and regulations, policies and institutions to prepare Australians for that change;
  5. International efforts to address that change."

Given the close correspondence between this mandate, and the research focus of the Centre for Future Work, we were very glad to make a submission to this inquiry.

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Historic Decline in Strike Frequency Associated With Record Low Wage Growth

The Fair Work Commission’s ruling to pre-emptively block industrial action (including restrictions on overtime and a one-day work stoppage) by Sydney-area train workers has brought renewed attention to the legal and administrative barriers which limit collective action by Australian workers. 

The Sydney trains experience is a high-profile example of a much larger trend.  Across the national economy, work stoppages have become extremely rare – and the extraordinary discretionary ability of industrial authorities to restrict or prevent industrial action is an important reason why.

The Centre for Future Work has compiled a database of historical work stoppage data, going back to 1950, including the incidence of work stoppages and the numbers of work days lost as a result (both in absolute terms and relative to the size of the employed workforce).

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