A Pay Rise Too Clever By Half

First things first: I know that some readers are going to want to attack anything I say after this paragraph, so can I just say — upfront — that the community and disability services workers who will benefit from the “pay rise” headed their way thoroughly deserve the money.

But the increase in their remuneration, announced by Julia Gillard on Thursday in a deal with unions, has absolutely nothing to do with the welfare of these people, or any concern for their standards of living, or even any consideration of how well (or poorly) they’re paid at all.

It’s purely about votes.

I was talking to a friend of mine about this yesterday, and he asked me where the money was coming from. I have to admit, I don’t know. But I’ll guarantee it will be ascribed to either the Carbon Tax and/or the MRRT (“mining tax”).

You see, everything Gillard and her government do from this point onward that involves throwing money around is going to be “sold” as a major “reform” that has been made possible by these insidious new taxes.

See what we can do with all this money? The miners and the polluters can afford it! In one stroke, we eliminate global warming and slosh tons of cash to deserving cases! How wonderful are we — the benevolent Labor government — into the bargain?

That’s the storyline; the reality is very different.

Indeed, Michelle Grattan observed yesterday in The Age that this time last year, Gillard’s government went before Fair Work Australia, arguing that precisely this type of pay rise could cost jobs and lead to cuts in government services.

This time last year, of course, Gillard wasn’t in the same depth of political excrement as she now finds herself in. She could afford to be cavalier about wage claims.

Grattan has also questioned why the government now feels it has the capacity to make this gesture a mere twelve months later (in what, I would note, are difficult and worsening economic world circumstances).

Grattan adds that 2011 is the year Gillard nominated as the “year of decision and delivery” and here’s where things start to rub.

The Australian, in an article by Ewin Hannan and David Uren published yesterday, reported that employers have already warned that this deal, between Julia Gillard and the union movement, needs to be quarantined from the rest of the economy to avoid fuelling inappropriate wage claims.

Gillard, on the other hand, has framed the changes, which will see about 150,000 employees — 120,000 of whom are women — obtain pay rises of at least $7000 a year as a redress of imbalance of the discrepancy between male and female remuneration arrangements.

The government’s media minders have seen to it that terms such as “historic” and “ground-breaking” have coloured reporting of these developments.

The cost of the measures to the federal budget is estimated at some $2 billion annually, which obviates the question about where the money is coming from.

In addition to the hit on the federal budget, state governments are expected to contribute too; thus far, these moves are already being resisted by Liberal governments in Victoria and New South Wales — as they should be.

Let’s look at the ugly politics behind this innocuously generous-looking initiative.

For starters, Gillard’s concern for low-paid women extends only as far as a narrowly defined and highly unionised group.

If you’re female and earn a pittance and/or less than your male peers, and you work in private enterprise, Gillard has nothing for you.

And if you’re male and earning a pittance, you simply don’t matter.

The Prime Minister has money to throw around, but only so long as it buys off the right interest groups and curries favour with the appropriate faceless union figures.

Grattan correctly notes that as these pay rises are phased over several years, there’s scope for Labor to make political capital out of it in the lead-up to the next election.

This is very true, but it hardly adds credibility to the notion that Gillard is righting a wrong in implementing these measures; rather, it conveys a distinct impression that she is pork-barrelling to buy herself capital to expend for brutally political purposes.

And coming back to the question of where this money is coming from, where is it coming from? Even with a Carbon Tax and a Mining Tax, and on its own figures, this government will still struggle to return its budget to surplus by its stated timeframe of the 2012-2013 budget (if, indeed, it ever delivers a surplus).

Thus, it’s reasonable to presume that Gillard is borrowing the money to buy these low-paid, predominantly female workers, off.

It’s not very astute, or prudent, when running a government that has already racked up $210 billion in sovereign debt in four years.

It raises two critical questions: one, just how much money will Gillard and the ALP tax, borrow and spend to attempt to restore their electoral fortunes?

And two, in a global economic climate which sees Europe close to implosion, the US and Japan perennially teetering on the brink of recession, a slowdown in China looming and our own economy hardly going gangbusters, world recession (or depression) has become a distinct possibility. Just how much damage is the ALP prepared to do to Australia in its naked obsession with the retention of power?

Make no mistake, even if the world around it collapsed, so long as Labor retained power and government, it would care about little else.

And that’s where this deal cannibalises — or should cannibalise — any kudos Gillard and her government derive from it.

You see, far from having enacted some sort of grand historic reform, what Gillard has done is to tokenise one group of people at the expense of and to the exclusion of every other.

She has set a precedent which anyone else looking for leverage in pay claims with employers can point to — with some justification — and demand their additional slice of the cake.

And she’s borrowing the money to do it, which just makes the farce more ludicrous.

A wages breakout is the last thing the country can afford, but with new taxes with economy-wide ramifications and precedents like the pay deal we’re talking about here, Gillard’s government is establishing the preconditions for just such a breakout.

And finally, returning to Grattan’s comments, she opines that the government hopes it can wedge the opposition and that the Coalition sees the risk; she observes that “the danger of objecting to wage justice for low-paid female voters is pretty obvious.”

As I said at the outset, the people who stand to take home more in their pay packets as a result of Gillard’s deal with the relevant unions are indisputably deserving of the money.

I have no argument against that fact whatsoever.

But perhaps if opposition politicians and some journalists — and I mean some journalists generally, and certainly not Grattan, Hannan or Uren — framed these issues with a look beyond the obvious and idiot-simple response, then perhaps the debate wouldn’t be about pay for female workers at all, but about the cynical manipulation of underpaid people by a desperate and morally bankrupt government and Prime Minister.

That’s a debate the Coalition could prosecute with little or no political risk whatsoever.

What do you think?