Strengthen AIRC powers: Hugh Stretton


Strengthen AIRC powers: Hugh Stretton

An Australian Industrial Relations Commission that set awards for all employees, including CEOs’, would be ideal, according economist Hugh Stretton.


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An Australian Industrial Relations Commission that set awards for all employees, including CEOs’, would be ideal, according economist Hugh Stretton.

The AIRC should have its powers restored to set minimum and maximum awards for all types of employees, Stretton told The Death of a Fair Go, Evatt Foundation, seminar in Sydney this morning.

He also argued that no company executive working in Australia, regardless of where they came from, should take home more than $500,000 per year in pay.

He drew on US research, which showed that CEOs performed when they were paid up to 22 times the basic wage, but any more than that and their performance declined.

Similar research commissioned by the NSW Labor Council showed that existing executive remuneration was neither defensible 'in terms of distributive justice nor organisational effectiveness'.

Over the past decade, executive salaries had jumped from 22 times to 74 times the average weekly earnings, and there was no evidence that executive salaries were linked to company performance.

According to the NSW Labor Council report, the finance sector exhibited the most 'corporate excess, with CEOs in the four major banks averaging 188 times the pay of their customers and staff' (see previous story).

Reducing CEO salaries would see a ‘splendid’ increase in corporate efficiencies and would result in CEOs exploiting themselves, Stretton claimed.

Sydney University political economy professor Frank Stilwell agreed saying it was inappropriate that CEOs were remunerated in line with CEO pay scales in New York and Tokyo, while workers were remunerated in line with pay levels in Manila and Jakarta.

Maintaining flexibilities

Stretton made it clear to WorkplaceInfo at the conclusion of the seminar that although he was in favour of restoring all AIRC powers and a rejuvenation of union activity, it would be inappropriate to put in a place a system that removed opportunities for workplace flexibilities.

He believed that flexibility enabled working families to balance their lives.

He didn’t have a problem with casual workers, as long as they chose the casual route and were compensated appropriately.

More power, but not as much

Visiting Fellow at the Australian National University Fred Argy had a slightly different view of AIRC power.

Argy told WorkplaceInfo at the conclusion of the seminar, the AIRC should involve itself more with the rights of trade unions and quality of life issues for workers, rather than regulating wages.

He believed Australia needed a strong trade union movement to protect the rights of workers.

The trade union movement should not be ‘shackled’ and it was up to the AIRC to police the situation effectively, he claimed.

Wages not entirely for AIRC

Although he felt it necessary for the AIRC to set and review safety net wages, he didn’t believe the AIRC had a role to play in going back to its old brief of wider award coverage.

Australia was too far down a different track to go back to such a system he said. Although he conceded to be ‘conflicted’ on the subject, he was reluctant to advocate too much regulation, he added.

However, he pointed out there was room for a tax system to ‘beef up’ the take home pay of low paid workers.

On the issue of dependent contractors and casuals he conceded there were problems because some outsourcing was done for ideological reasons to deliberately by pass unions and the payment of appropriate wages.

He believed something needed to be done to fix this ideological use of workers.

However, not all dependent contractors and casuals were ideological forms of employment, he said.

On the issue of executive salaries he said the market and economy was ‘corrupt’.

For more information on the Evatt Foundation, the seminar organiser, see the Evatt Foundation website.


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