Australians have never been wealthier than they are at the moment. But that is not translating into economic activity because workers and families are assailed by an ever-changing economic and employment landscape, which is making them uncertain and cautious.
The emerging theme of “cost out” – Australian companies seeking to improve their bottom line by putting pressure on workers – has only added to an already cautious consumer, focussed on paying down debt and saving for the future.
Likewise Australians are worried about how they will fund their retirement and how they might help their children buy a home or manage what might become hefty university fee debts.
This theme of consumer caution has permeated discussions with clients in Melbourne this week.
So news yesterday that the Government bypassed the Senate and introduced a tariff on fuel to raise the excise, followed by employment minister Eric Abetz declaring he wants to meddle in the pay deals that Australian business and workers do is just another squeeze on employees and likely to further weigh on consumer spending plans.
The Australian reports that Senator Abetz will introduce changes to the Fair Work Act which will require workers and management “to consider productivity improvements when bargaining for new enterprise agreements.” The Fair Work Commission will need to satisfy itself that both parties have done this before approving enterprise agreements.
The government clearly has a certain subset of unions in its sights with Senator Abetz saying yesterday that “When you get wage increases of 30 per cent occurring in the maritime sector …. and then the union brags that there was no productivity offset, well, that tells you that someone is gouging big time at the expense of someone else, and that must have repercussions elsewhere on the employment front.”
But the consequence, either intended or unintended, is that these changes give business a much stronger hand when bargaining with employees across the entire economy, effectively saying no productivity gain, no wage rise.
It’s just another sign that Australian workers remain under pressure and another reinforcement that that the transition from mining investment boom to more balanced domestic growth will take longer than otherwise expected because Australian workers and consumers are under so much pressure.