By Peter Boyle
"Tax the rich, ACTU urges" and "ACTU's $1b jobs plan" were some of the headlines describing proposals discussed at the ACTU wages committee on July 15.
In fact, the proposals from the peak union body were nowhere near as radical as the headlines made them sound. Basically what the ACTU officials proposed was a little decorative icing on a new two-year accord deal to continue wage restraint.
By the ACTU leaders' own estimates, their proposals would create only 115,000 jobs over the next two years in a situation where official unemployment is just under 1 million. That many full-time jobs have been lost in the last six months alone.
The idea of spending $1 billion on jobs compares with the Defence Department's plans to waste $3 billion on new military technology at an aerospace technology fair in October. The ACTU wants Canberra to spend $250 million on subsidies to industry, $300 million on short-term work for youth (on projects like reforestation, land reclamation and improving community amenities), $100 million piloting the Carmichael Report's youth training scheme, $75 million to state governments to create jobs in the most depressed regions and the rest on government financial support for an export-oriented "clean food" processing industry.
It seems the figure of $1 billion was carefully calculated: according to the July 16 Financial Review, "government sources" say that it is the same amount planned to be announced in the August budget.
The ACTU's "tax the rich" proposal is very modest. It would raise the top marginal income tax rate by two cents in the dollar to 49%, then reduce it by one cent after a year. Prime Minister Keating rejected this even before the ACTU wages committee met, saying that it would raise only $500 million in a year. The top marginal tax rate has been reduced from 60% to 47% under the Labor government.
The ACTU also made a plea for the linking of further tariff reductions to the unemployment rate, but this too was rebuffed by Keating.
The main decision of the ACTU wages committee was to put in place a plan for a new two-year accord with the Labor government for "moderate and sensible" wage adjustments. The ACTU would claim a flat rise of about $10 in the national wage case next month, and then nothing further for two years.
As ACTU president Martin Ferguson admitted, the $10 would be the first nominal rise for many workers more than a year, because most have missed out on increases through the enterprise bargaining process under Accord Mark VI.