Work Choices
Generally a take it or leave it choice given to Australians entering the workforce or renegotiating their employment.
Contents |
Dr Boy's conspiracy theory
The last election
In the last Australian Federal election John Howard's Liberal Party of Australia won in a convincing victory over Mark Latham's Australian Labor Party. John Howard emphasised many times throughout the campaign that he would keep interest rates low. He did this to garner support among a large group of Australians who had recently bought property at hugely inflated prices and others who had little economic education other than having been told that high interest rates are bad.
How does I kept rates low
A number of factors influence domestic interest rates but the most prominent are Consumer spending and Inflation, Investment and Government spending. The Government can try to keep a lid on interest rates by limiting its own spending but it only controls a small amount of the money in the economy and hence the effect is not profound. Levels of total investment are determined mainly by the global supply and demand for capital and in a mobile capital market the government has very little control over Investment levels.
This leaves one option for keeping rates low, keeping consumers from spending their money.
Keeping Consumption low
The Govt doesn't physically control how much you can spend and hence it's hard to change consumer spending. However you can keep spending down by making sure people have less money to spend. A government could up taxes if it felt a little suicidal. The Govt. could also amend IR legislation to keep wages low.
If wages are kept low then people have less money to spend, spending less money slows the economy and holds the appropriate domestic rate of interest low for the mid-term.
tl:dr
- Work Choices is designed to place power in employers hands
- This forces wages down
- This leaves people with less spending money, regardless of our Nation's economic strength
- This keeps spending down
- Drop in spending means lower interest rate pressure and hence low interest rates
In conclusion
The government is pushing the IR laws to maintain its ridiculous policy of trying to keep interest rates low. If you don't believe me here's Peter Costello saying the same thing with less information and more spin. Ironically this is to keep a promise made to the painfully stupid property buyers who bought houses (and 20 years of debt) based on inflated real estate prices and the advice of stupidly lucky investors making books about how to go about being stupidly lucky. These are the same people who will now have trouble paying their mortgage in five years time because their new workplace agreement makes no provision for any payrises.
So now, due to a ridiculous promise made as an appeal to stupid voters, our entire economy has to have their wealth capped. Go CYBORG!
