Labor Prime Minister Anthony Albanese used his National Press Club (NPC) address on June 10 to announce his government was organising “a group of leaders from the business community, the union movement and civil society” to participate in a “roundtable to support and shape our government’s growth and productivity agenda” this August.
The objective of this roundtable, Albanese said, was to build broad support for more economic reform to drive growth, boost productivity, strengthen the budget and “secure the resilience of our economy, in a time of global uncertainty”.
This should ring warning bells to the union movement and civil society when a Labor government tries to enlist those sectors to support that agenda.
“Economic reform” in this case is code for the billionaire class’ insatiable demands to further reduce the already-too-little tax it pays, grab more public subsidies, further erode environmental and social regulations and further weaken workers’ rights to organise on the job.
Decades ago, the Bob Hawke-Paul Keating Labor governments deployed a series of roundtables between it, big business and unions to implement pro-capitalist “economic reforms”, with the help of the infamous Prices and Incomes Accord.
It was a massive con job, as former Green Left editor Norm Dixon explained in 2001.
“For seven years, between 1975 and 1983, Australian workers suffered under the attacks of a union-bashing, conservative government that attempted to roll back the gains the labour movement had won in the early 1970s,” Dixon wrote.
“While capital was able to claw back some gains — real wages were reduced — it was not sufficient to restore big business profit levels to that of the 1960s. Nor had the conservatives been able to defeat the labour movement sufficiently to allow the level of industry restructuring necessary to make Australian big business ‘internationally competitive’.
“Recognising that the conservative frontal attack had not worked, and fearing an economic upturn on the horizon in which the trade union’s strength could see another shift in the share of national income to wages, Australia’s capitalists sought to enlist the help of the Australian Labor Party (ALP) to achieve, through cooperation, what the conservative parties could not win through confrontation.
“Big business let it be known that it would be prepared to back an ALP victory if the party could deliver ‘wage restraint’ from the unions. While the Accord was formulated as an alternative to the conservative parties’ failed hard-line anti-union approach to industrial relations, the goal was the same: To reduce the share of national income going to wages and to boost the share going to profits.”
Since that time, nearly $7 trillion has been shifted from wages to corporate profits and the rate of unionisation has plummeted from more than 50% to 13%.
Weakened unions
A new study, by Professor David Peetz for The Australia Institute’s Centre for Future Work, has confirmed that the deliberate weakening of unions is the main reason why wages have not kept up with the cost-of living.
It also found that Australia has one the highest levels of insecure work among Organization for Economic Co-operation and Development (OECD) countries. Millions of workers are in some form of insecure working arrangements (casuals, independent contractors on fixed-term contracts), according to research by the Australian Council of Trade Unions (ACTU).
The systematic degrading of workers’ collective power has created a situation where, despite persistent labour shortages, wages have been stagnant for decades and fallen behind the cost of living, especially housing.
Albanese and Treasurer Jim Chalmers want workers to believe that the reason their wages have not kept up with the cost of living is because labour productivity is not rising fast enough. They want unions to deliver more concessions to big business at this roundtable.
But workers giving up power and will only guarantee that wages will fall further behind; history shows that the capitalists do not pass on the benefits of greater productivity.
Peetz’s study, The curious incident of low wages growth, found that after real wage declines during the early 2020s and rapid inflation, real wages in December 2024 were at the same level as they were in December 2011. “In that same period, labour productivity (measured by gross value added per hour worked market sector) had risen by 15.1%. In other words, none of the gains in labour productivity between 2011 and 2024 went to workers.”
Who gains from productivity?
Under capitalism, labour productivity is controlled by the capitalist class. If they invest in new technology and equipment that increases productivity (that is, produce more with lass labour and other inputs), they do so in the expectation of making greater profits, not for their employees’ benefit.
Peetz said Treasury analysis found that, at the workplace level, only 10% of productivity gains were typically passed on to workers. He said “the vast majority of wage gains by workers had always been due to factors other than workplace productivity growth — that is, the relative bargaining strengths of the workers and employers”.
His report found that of the 16 key developments in the labour market over the past half century, 14 reduced workers’ power, one increased the power of female workers only and just one increased the power of all workers.
Albanese’s did not include much detail in his productivity roundtable announcement (Chalmers is due to give more detail in his June 18 NPC address), but he repeated the big business spin — that real wage rises derive from increasing productivity and cutting taxes.
Albanese said his plan is “to build an economy where growth, wages and productivity rise together”. He said the work is already underway and pointed to the National Productivity Fund [NFP], “incentivising state and territory governments to drive efficiencies in construction”.
Labor set up the $900 million NPF last year to reward state governments for “streamlining commercial planning and zoning, and removing barriers to the uptake of modern construction methods”. Not surprisingly, this was welcomed by big business, especially developers that hope to profit from less building regulation.
The Australian Financial Review described it as a “slimmed-down version of the $5.7 billion in payments to the states by the Keating and Howard governments between 1992 and 2005 for competition reforms, such as removing restrictions on retail trading hours, establishing the national electricity market, privatising government businesses, uniform national food standards and deregulating dairy price controls”.
Labor’s NPF idea was taken from the Business Council of Australia (BCA).
But even big business recognises that, ultimately, only new technology — not less regulation — drives major productivity rises. The BCA called on Labor on June 13 to supercharge investment in research and development (R&D) by “incentivising businesses to invest more”, conceding that corporate investment had declined to 1.7% of gross domestic product (GDP), which is below the OECD average of 2.7%.
The BCA’s demands include: abolishing the tax incentive threshold or increasing it to $250 million; a suite of tailored incentives that attract new R&D activity to Australia, including preferential tax treatment; and a nationally coordinated network of industry-led R&D centres, modelled on the British $1.3 billion-a-year “Catapult Network” which provides R&D infrastructure and technical experts to “drive innovation” through public and private partnerships.
The BCA also wants more private-public partnerships, even as the public reels from what Professor John Quiggin recently described as “catastrophic failures” in aged care and acute care hospitals from so-called “public-private partnerships”.