Tuesday, March 10, 2009

Labor's job destruction package

Julia Gillard's moves to reregulate Australian labour markets should be rejected by the Senate. The proposed moves helps trade unions but will destroy jobs in vulnerable industries such as hospitality where huge wage increases are about to occur. Regulating huge increases in holiday rates for restaurant staff has a simple and immediate effect as a restaurant-owner told me recently - we will shut the restaurant on holidays.

In the current economic situation Australia urgently needs the upmost wage restraint and the maximum labour market flexibility. Fiscal expansions will not cut labour costs and yet that is what is urgently needed if labour demands are to be sustained in industries facing reduced demand for outputs.

Think payroll tax cuts, superannuation levy subsidies - anything to keep the pressure off labour costs. But reregulating the labour market to enforce a union-driven demand for an enhanced role is utterly daft policy.

The Liberal Party should not duck the heat on labour market reform. The Howard Government generated strong wage growth and the lowest unemployment rates in Australia in 34 years. This is something to trumpet not deny.

2 comments:

observa said...

Well if printing money doesn't work for them then obviously it's time to print jobs Harry. They can pay for it with the carbon credits they print. As Mogambo would say- Wheeee! This investing stuff is easy!

observa said...

Yeah, I know- Fer gorsakes stop laughing, this is serious!!!(with appropriate triple exclamation marks)