Saturday, November 27, 2010


Any idea of introducing equal pay for all is far-fetched. But the concept of men and women receiving the same amount of money for preforming the same task is entrenched in Labor policy.

Nevertheless the ALP has not paused before abandoning this principle when confronted with the prospects of a budget blow-out.

Of course, that's not the real issue. What this column is about is the idea of pay relativities . . .


This story is about numbers, both little ones and bigger ones, so let’s start in the middle. The average salary is $67,116. If you’re earning more than this, pause for a second and feel good. If you’re earning less, console yourself, because money isn’t everything. It supposedly can’t buy, for example, either happiness or love; although possessing wealth might offer some consolation for those lacking emotional well-being.

The second number is 1/8/10, or August 1st, because that’s the day Julia Gillard received a $24,371 boost to her salary, taking it to a yearly total of $354,671; a rise of $268 a week. If you’re tired of adding and subtracting by now, just understand that this was a rise of 4.1 percent.

The third – and the most important – figure amounts to zero, because that’s the point of the government’s submission this week to the gender equity pay case. It argued that any pay rise for female community sector workers would have to be matched, exactly, by cuts to jobs and services. Otherwise the budget couldn’t be brought back into surplus. Arguing before the bench of Fair Work Australia, the government effectively submitted that it was more important to balance the budget than for women to have equal pay for performing the same work as men. That’s because restraining government spending is the new holy grail of Australian politics. Labor needs to demonstrate it isn’t profligate. How better to do this than by holding back a bit of extra pay for workers of a union that will support the ALP anyway? It just happens to be an unfortunate accident of timing that the government’s case dropped like a clanger in the same week as some (Labor) politicians launched their own push for more pay.

Special Minister of State Gary Gray had earlier, and quite correctly, noted there are large disparities between people working in the private sector and politicians. He claims he dropped almost $545,000 on the day he finished working for Woodside and was elected to represent his constituency. Interestingly, he didn’t bother to comment on whether he would ever have obtained this job in corporate affairs with the petroleum giant if he hadn’t previously been National Secretary of the ALP, nor on why he had chosen to become a MP if he was so concerned about their low level of remuneration. It couldn’t have come as a surprise.

Grey does, however, have a point. He noted that various benefits (the first-class round-the-world airfare every three years; the electorate allowance of up to $46,000; and the per-diem allowance for living in Canberra) could all be cashed-up at no increased cost to the taxpayer, resulting in far greater transparency for the system. It would also benefit the MP’s, but that’s not the point. In the past, both sides of politics have connived at these extra payments as a way of hiding what are, effectively, salary increases. Gray wants to stop this. Measured against the salaries received by banking CEO’s, politicians salaries still look pathetic. But then again, if they want money they could’ve chosen another career.

It is understandable that MP’s expect more money for their work. But the central question they should be asking isn’t how they can dip their hands in the public till to extract a bit more – the real issue is how such wide discrepancies of pay have become entrenched across society; together with its ancillary question: is this representative of the type of country we want to become? Because Australia has become measurably more unequal since Labor came to power.

The idea that we need to “balance the budget” is, according to many economists, nothing more than fiscal populism. Nevertheless, this requirement has now lodged itself securely in the mind of the marginal voter to become political reality. After all, electors need to make their own budgets meet and can’t understand why the government should be let off a similar discipline. A popular belief has taken hold, insisting that a balanced budget reduces the need to borrow and thus keeps downward pressure on interest rates. This is the new holy grail. The need to produce a balanced budget brings any politician to their knees.

Instead of tackling this conviction, Wayne Swan has endorsed it wholeheartedly. He, more than anyone, is aware of the devastating results of entrenched disadvantage, having written about them in his book, Postcode. He seems, however, to be unable to offer us a road-map for escaping from the problem he’s outlined with such clarity. Treasury has offered him a way out of the maze with the Henry Tax Review. But taking this path has proved too difficult for this government. Indeed, the governments decision to warn of the deleterious consequences of a pay rise for the lowest-paid workers in the community simply emphasises that Labor accepts and endorses accepted economic reality.

The revelation of the government’s position in the tribunal prompted immediate protestations of denial. Netball enthusiast and Minister for the Status of Women Kate Ellis suggested that Labor didn’t actually mean what its lawyers said. She asserted there hasn’t been any change in Labor’s support for equal pay. She hurriedly claimed that to argue this “on the premise of the submission . . . wilfully peddles a misinterpretation of the Government’s position”. How silly of anyone to think that the government lawyers might be accurately representing the government. In her mind at least, it turns out that Labor is fully committed to “achieving equality for Australian women”.

Just, presumably, not yet.

Ellis is free to continue with her impersonation of Alice in Wonderland, pretending that ‘to say what you mean is the same as to mean what you say’. Nevertheless the reality is that, if this government has its way, any change to the pay differential will be glacial. That’s fine – as long as you’re not one of the affected workers. The point is Labor faced a choice and it’s moved to endorse the current economic system. These pay differentials will widen further over time.

There is a simple way out for the government. Gillard should immediately introduce legislation tying the pay of politicians to the lowest paid in our community. She could still keep her own latest pay rise, the one smuggled through quietly a couple of months ago. Doing this would immediately demonstrate her credibility and help a speedy return of the budget into surplus.


  1. This getting back to a budget surplus is one of the worst objectives that Howard/Costello has forced on the political scene. Howard/Costello incurred huge debts during their years in power, the debts were just not monetary in form - they were a huge debt of unprovided infrastructure as Ross Gittins , in the Sydney Morning Herald has recently pointed out. The scrapping of the policy on equal pay shows just how far the Labor party has sunk - the question must be asked -Do Labor have any serious policy objectives other than clinging to power?