The escalating cost of living is your ally when you’re an opposition seeking election, but when you’re in office, it’s a rampaging beast to manage, economically and politically.
Labor railed about real wages stagnating under the Coalition. Now grappling with rising inflation, the Albanese government has had to tell people to brace for even higher prices and mortgage costs before their real wages start to improve (hopefully) in 2024.
That’s the grim background to next Thursday-Friday’s jobs and skills summit, from which Prime Minister Anthony Albanese and Treasurer Jim Chalmers will be trying to extract a story line of common purpose, even if not unity, from stakeholders with disparate and conflicting interests.
Calling this a “jobs” summit is, incidentally, somewhat of a misnomer. For the first time in records going back four decades, we currently have more job vacancies than we have people who are unemployed. The problems are other than a shortage of jobs.
Albanese makes much of wanting to emulate Bob Hawke’s consensus style and this summit, like that of 1983, is at core a gesture of inclusion, while grappling with very different economic conditions.
Preparing for the day-and-a-half gathering – in parliament house’s Great Hall – of more than 100 participants from business, unions and civil society, ministers had by Thursday this week conducted over 65 meetings with a wide range of groups around the country.
The summit itself will be carefully choreographed. Given its relative brevity, the formal time devoted to particular issues is short. For instance “sustainable wage growth and the future of bargaining” gets an hour on Thursday morning, while migration, divided into two sessions, runs from 8.50 to 10.30 on Friday morning.
Obviously there’ll be much informal discussion outside the conference room. Tea breaks, a dinner on Thursday night, and the availability of “light breakfasts” provide plenty of opportunities for networking, as well as for participants to rub shoulders with (and lobby) ministers and each other.
Among the minglers will be Nationals leader David Littleproud. When opposition leader Peter Dutton declined an invitation, Littleproud quickly sought one.
Distinguished economist Ross Garnaut, economic adviser to Bob Hawke and climate change adviser to the Rudd government, will speak at Thursday’s dinner.
The summit is a forum for the airing of ideas and wish lists. Centrally, it is a platform for the government to set its narrative as it looks to the October budget and beyond.
But the narrative needs to be underpinned by some broad agreements. The government can’t afford the commentary afterwards to conclude it was primarily a hot air occasion.
Hence there’ll be a desperate scrabbling by the government to land agreement in key areas which, despite the extensive agenda, boil down to the interrelated issues of industrial relations, immigration, and skills.
As of now, unions and employers are miles apart on workplace relations reform despite their common view that the present system is unfit for purpose and must be changed.
The ACTU this week flagged it is seeking a return to sector-wide bargaining – partially reversing the 1990s move to enterprise bargaining – which would strengthen the hand of workers in pursuing pay rises.
ACTU secretary Sally McManus said on Wednesday that in our service-based care economy “it makes sense to have multi-employer bargaining – that both the workers’ representatives and the employers sit down and negotiate across their sector”.
Asked on the ABC whether she had any reason to think the government was ready to embrace the ACTU’s ideas for big reforms in industrial relations, McManus replied bluntly: “I’d say this: they were elected on a mandate to get wages moving”.
The ACTU proposal has encountered immediate push-back from employers, with the Australian Industry Group’s chief executive Innes Willox describing the call as “a throwback to the 70s”.
Willox argued: “The cornerstone of our workplace relations system is the objective of achieving productivity and fairness through an emphasis on enterprise-level collective bargaining”. The Business Council of Australia was also critical of the ACTU proposal.
Chalmers on Thursday danced around when questioned on this gulf. But Workplace Relations Minister Tony Burke, who is doing the detailed wrangling on industrial relations, made it clear he was open to the ACTU proposal, telling the ABC he was “very interested” in it and that the “destination” he was aiming for was to “get wages moving”.
Where the government ends up on the ACTU demand will be an early test of its relationship with the union movement, to which it has already thrown a bone by emasculating the Australian Building and Construction Commission ahead of its scrapping.
If the employers are to give some (unspecified) ground on industrial relations, the unions will be expected to be flexible about a higher immigration level.
Businesses facing acute labour shortages are desperate for more migrants, and there has been speculation about the present cap of 160,000 being raised to about 180,000-200,000.
Immigration is good for the economy. Apart from filling labour shortages, migrants spend their money, creating demand and therefore further jobs.
But boosting migration is not without short-term problems. Migrants put strains on housing (at a time of high rents), the health system (already stretched) and other services. And bringing in more skilled migrants doesn’t necessarily address acute shortages such as in the aged care industry.
Traditionally unions are wary of too many migrants. In the current context, they are demanding that a rise in immigration should be tied to conditions, including training measures for locals. To the extent businesses are asked to do this, there will be some complaints.
One thing that desperately needs fixing is the slow processing of visas for immigrants. The government says it is working on the backlog, but unblocking the system will take a while.
The supply of local workers could also be increased in the short term by, for example, allowing older people to earn more before they lose some of their pension, and bringing forward the start date for Labor’s more generous financial arrangements for child care. But these moves impose budget costs.
It’s all a matter of trade offs.