Labor, ACTU announce Accord VIII


By Chow Wei-Cheng

In preparation for the federal elections, the ALP and ACTU have unveiled another Accord agreement. It promises a low inflation target (2-3% per year) in return for "safety net" pay increases totalling up to $50 per week by the year 2000.

The ALP and ACTU will ask the Industrial Relations Commission to award three more safety net pay increases between 1996 and 1999 in addition to the $8 per week increase due next March under the current wages system. These increases will be $9-12 per week, but for low paid workers $11-14.

In addition, Accord Mark VIII promises:

  • to create 600,000 jobs by March 1999 and decrease unemployment to 5% by 2001;

  • to "review" the $816 maternity allowance announced in the budget with the hope of doubling the payment to allow 12 weeks' paid maternity leave;

  • to support pay rises of about 6% for federal public servants and the separate wage claims lodged in the Industrial Relations Commission by teachers and nurses.

The Australian Chamber of Commerce pledged to fight the agreement, claiming the agreement "is politically driven, inflationary and does nothing to address the current account deficit".

The Australian Financial Review, while congratulating the inflation target, disliked the use of centralised wage fixing to achieve it. The editorial preferred enterprise bargains to achieve this instead.

Far from a return to centralised wage fixing, the rationale behind this Accord is part of a further undermining of the award system.

Prior to Accord VIIB in the middle of last year, the wage fixing principles agreed were for the IRC to provide rulings only for workers who fail to negotiate enterprise agreements in their workplaces or in proven cases where there are improvements to the "work value" of employees. General pay rises apply only to an award "safety net"; all over-award payments and allowances, which have made up an increasing portion of wages over the past 20 years, will be up for trade-off in enterprise bargains.

Thus workers in weakly organised and non-unionised workplaces in the less prosperous areas of the economy will still suffer much more.

The "safety net" is hardly generous. Despite a strong economic recovery, average weekly earnings growth has fallen from an average of 6.7% over 1985-90 to around 2-3% from 1990 to 1995.

The basis of the Accord has always been wage restraint and productivity improvements to keep inflation low. The aim of this Accord, despite the pre-election posturing, is to keep wages growth below productivity growth.

Of the quite substantial productivity increases in recent years, relatively little has gone back to workers. A maximum of $50 per week over four years could hardly be described as compensation.