Monday, June 06, 2011

Mandates and wages

I really don't know why I, or the SMH, waste my time on Paul Sheehan.

This morning's diatribe.

He accuses the speakers in the debate against BOF's IR changes to give Government direct control of public service wages of being engaged in denial, of having falsely claimed that BOF "has just engaged in one of the greatest acts of vandalism ever perpetrated against public servants in NSW, even vandalising the democratic process."

Strangely I agree with Sheehan that the resort to the "mandate" question is erroneous. The various speakers said BOF had no mandate to introduce the laws, the coalition maintained they had such a mandate because they had been elected to be financially prudent.

The concept of the "mandate" was in my lifetime first advanced by Gough in trying to force the Senate from 1973-74 to pass his reforming legislation, but in reality he used that as a debating technique to heighten public support for the more realistic objective of a Double Dissolution.

We practice representative democracy with frequent elections. All promises are meaningless, we empower elected representatives to vote however they want to. The judgement is meant to come at the next election. (That quite simply is the best and briefest case I can make against four year terms too).

The correct charge to lay at BOF is that of deception, not lack of mandate. Like many class warriors Sheehan likes to imagine public servants as a class vote Labor. Certainly at the last State election many if not most voted Liberal, seduced by the vision of a stable responsible Government committed to improving services.

The second charge laid at BOF is that the law itself is "undemocratic" by removing the arbiter. But he hasn't removed the rights of unions. The reality is he will make the unions stronger because the ONLY way to bargain will be direct industrial action.

The real attack of Sheehan is that capping public sector pay rises was something Labor wanted to do anyway.

Unfortunately none of this debate questions whether the underlying claims, that public servants have received pay rises above productivity improvement and above private sector wages is either true, or if true, has any merit.

The primary source of these claims was a report by Henry Ergas for the Menzies Research
Centre in 2007. This was a campaign by the Liberals to claim that economic prosperity was being wasted by states by increased wages rather than additional infrastructure, a strategy designed to deflect the criticism of the then Howard Government for its failure to so invest.

The three public service sectors Ergas most focussed on were policing, teaching and health. His study actually showed wage movements in line with private sector wages. This is one trick to remember - public sector wages never have above award components while private sectors do - so it is the movement of wages not awards that need to be followed.

The phrase "labour market" is often used but ignores what it means. If you pay these public sector jobs poorly you struggle to hire people, especially people of the calibre you want. All of teachers, health workers and police have highly valuable and mobile skills for which they can be paid more than public sector employment generates.

The second is to ask the question of whether there are massive productivity improvements possible in these three labour intensive areas? What is a productivity improvement in teaching - larger class sizes? In nursing or allied health - more patients per health professional?

In fact productivity improvements are easier to achieve in health support (the clerical jobs) - should that benefit go to the health support workers or the front line professionals.

But finally there is the real democratic question. What would an opinion poll say in response to the questions "Do our teachers/health professionals/police deserve more pay?" The answer to that question would probably be yes - and hence the reticence of BOF to tell the electorate beforehand of his plans.

Novae Meridianae Demetae Dexter delenda est

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