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  • University-to-Job Pathways Key to Boosting Graduate Employment Outcomes

    New research shows active strategies to directly link university degrees to a job are needed, to better support university graduates as they negotiate a rapidly changing labour market.

    The report, by the Australia Institute’s Centre for Future Work, shows that employment outcomes for university graduates have deteriorated significantly since the Global Financial Crisis, with only 73% of recent university graduates finding full-time employment within 4 months of graduating – down from 85% in 2008.

    Key Findings:

    • At the individual level, a university degree is still very valuable: people who hold a university degree are more likely to be employed, more likely to be employed in a stable job, and earn higher average wages and salaries. Half of new jobs created in the coming 5 years will require a degree.
    • However, many recent graduates report being underemployed or in insecure jobs that do not utilise their specific skills—including graduates who studied technical skills or STEM subjects.
    • The report makes 9 recommendations to improve university-to-work transitions for future graduates, including establishing a national higher education planning capacity, and creating a timely and high-quality labour force information system.

    Alison Pennington, Senior Economist, Centre for Future Work:
    “Employment outcomes for university graduates have deteriorated significantly since the GFC,” says Alison Pennington, Senior Economist at the Centre for Future Work and co-author of the report.

    “Finishing tertiary education and finding a job in your field is a difficult and haphazard experience, which is leaving many graduates in jobs that do not fully, or even partially, use their hard-won and expensively acquired skills.

    “Vocational degrees, which are tied to specific occupations like health care, engineering or teaching, have the best employment placement rates. As seen in these professions, directly linking degrees to jobs through paid placements, occupational licensing and accreditation would greatly improve the situation of graduates.

    “A hands-on and direct approach that channels graduates directly into relevant career opportunities is needed. Australia could learn a lot from other countries, especially in Europe, where this is already being achieved through forecasting future skill requirements and planning higher education offerings accordingly.”

    Noel Edge, Executive Director of Graduate Careers Australia:
    “The overwhelming message from this report by the Centre for Future Work is the need for further research in graduate employment,” says Noel Edge, Executive Director of Graduate Careers Australia.

    “Research to explore the emerging work environment for tertiary education students in Australia, beyond basic government labour-market forecasting and graduate outcomes reporting, simply does not exist.”

    The report was commissioned by Graduate Careers Australia.

    The post University-to-Job Pathways Key to Boosting Graduate Employment Outcomes appeared first on The Australia Institute's Centre for Future Work.

  • Job Opportunity: Research Economist

    The successful candidate will offer:

    • A graduate degree in economics or a closely related discipline.
    • Knowledge of and experience with a wide range of labour issues, preferably including: labour market statistics and trends; characteristics and determinants of employment; industrial relations and collective bargaining; wage determination and inequality; gender, racial, and demographic aspects of labour markets; the impact of technology on employment; macroeconomic policy and labour markets; and others.
    • Demonstrated ability to write to deadline for professional and popular audiences in a credible, succinct, and accessible manner.
    • Strong quantitative skills, including ability to access statistical data, analyse it (including familiarity with statistical tools), and report it in a variety of textual, tabular and graphical formats.
    • Confident communication skills, including ability to speak to public audiences, classrooms, and the media.
    • Ability to work collegially with other members of a research team.
    • Commitment to a progressive vision of work and fairness, including the goals of equality, participation, collective representation and trade unionism.

    Responsibilities of the position will include:

    • Research and completion of several project-length research papers, briefing notes, and shorter commentary articles per year on a range of topics related to labour markets and labour market policy.
    • Ongoing monitoring and analysis of labour market data and information.
    • Helping to maintain relevant websites and databases.
    • Public speaking, presentations, lectures and courses, media interviews, and related communication and educational activities.
    • Minimal office and administrative functions.

    Ability to undertake occasional out-of-town travel (including overnight travel) is essential, as is ability to successfully work in a self-managed and autonomous manner.

    The position will be offered on a one-year term-limited basis, with possibility for renewal. Salary will be commensurate with qualifications and experience.

    Applications are especially invited from women, indigenous persons, other racial and linguistic communities, people with disabilities, and other marginalised communities.

    Please forward applications (including contact information, qualifications, experience, two samples of written work, and names and contact details for two references) in confidence to cfwjob@tai.org.au. Please cite “Economist Job Application” in the subject field of your message; supporting documents should be attached in pdf format. Receipt of applications will be acknowledged by e-mail. Only candidates selected for an interview will then be contacted; no phone calls please.

    Applications must be received by 5:00 pm AEDT on Wednesday 9 October, and interviews will be conducted in Sydney on Wednesday 23 October 2019.

    The Centre for Future Work is an initiative of the Australia Institute, Australia’s leading progressive research institution. Thank you for your interest in the Centre for Future Work.

    The post Job Opportunity: Research Economist appeared first on The Australia Institute's Centre for Future Work.

  • Paid Parental Leave for Fathers Advances Parental Equality

    In this commentary, Centre for Future Work Economist Alison Pennington reports on a timely roundtable discussion held with work/care policy experts on Iceland’s “father’s quota” parental leave system, and the future for paid parental leave in Australia – co-hosted with the Nordic Policy Centre.

    Research presented by leading Icelandic academic Dr. Ásdís Aðalbjörg Arnalds on the day shows that paid parental leave for both parents at wage replacement levels is key to building more equal workplaces, families and communities, and a modern dual work/care model.

    The post Paid Parental Leave for Fathers Advances Parental Equality appeared first on The Australia Institute's Centre for Future Work.

  • Where To Now for Union Campaign?

    Workplace Express is Australia’s leading labour policy and industrial relations newsletter. Please visit its website to subscribe.

    Where to Now For Unions?: Experts

    Reprinted from Workplace Express, May 27, 2019.

    Future union membership numbers will depend on how effectively unions organise without being able to rely on the political system delivering changes to workplace laws, according to an expert on employment relations.

    In the immediate aftermath of the Morrison Government’s election win, Griffith University’s Professor David Peetz said it was likely that it would be harder to grow union membership under the Coalition than under Labor.

    “In the end, it’s up to unions to organise effectively, they can’t rely on the political system to deliver what they would like, even though it can’t be denied that politics makes a big difference,” he told Workplace Express.

    Whether union membership would fall under three more years with the Coalition in power depended on a range factors, said Peetz, including the government’s ability to pass inhibiting legislation; the movement’s own organising performance; and the effects of underemployment, which both put a brake on union bargaining power and reduced wages growth.

    “Has the focus on political campaigning taken the edge away from workplace organisation, or has it reinforced it?” said Peetz.

    “Will union activists feel so disillusioned by the election result that they give up?

    “Or will they put more effort into workplace action in recognition of the failure of political action?

    “I think these are all things that will become clearer over the next couple of years.”

    Deal ‘protections’ weaker at the margins: Peetz

    Union membership is currently running at less than 15% of the workforce, with unions having a stronghold in the public or government sector thanks to nurses, teachers, public servants and police (see Related Article).

    However, private sector membership remains a weak point, amid a shift away from enterprise bargaining to award coverage.

    Peetz, who is currently a visiting fellow at City University of New York, said the fall in enterprise bargaining coverage was mostly a delayed result of the decline in union density.

    “EB coverage held up for a while because it suited some employers to stick with union bargaining arrangements when unions were weaker,” he said.

    “But eventually a point had to come where those employers would decide to circumvent unions altogether and/or the award simply caught up with what the EB rates were.

    “Of course it means that fewer people are now getting the ‘protection’ of EBAs, but that protection was getting weaker at the margins anyway, and the bigger picture is the decline in the proportion of people getting the ‘protection’ of unions.”

    Peetz said the biggest impact would be felt in non-union workplaces.

    “In unionised workplaces, it’s workers’ own experiences of unions that will determine how well or badly unions go.

    “Unionism is, to use econo-speak, an ‘experience good’.

    “There, unions’ future is very much in their hands.

    “In non-union workplaces, where quite a few employees have no direct experience of unions – or it was so long ago it’s not really relevant – the ideology that comes through the media is more important, and the question of who’s in government and what they say and do, and what employers with government support do, and what the media themselves do, becomes more important.”

    Private sector bargaining ‘out of reach’: Pennington

    Last year, the Centre for Future Work released a report, On the Brink, contending that enterprise bargaining was on the edge of collapse, largely due to its abandonment by the private sector (see Related Article).

    The report, by Centre economist Alison Pennington, said that more than half of the reduction in private sector coverage is due to the termination or expiry of large agreements in the retail sector and the accommodation and food service sector.

    She found that private sector agreements dropped by 46% between December 2013 and June 2018 (from 22,638 to 10,333), while the number of employees under agreements fell by 34% (from 1,950,561 to 1,288,100).

    Last week, Pennington told Workplace Express that new data from the Department of Jobs showed the number of employees covered by enterprise bargaining has shrunk by another 170,000 in the six months to December 2018.

    She did not expect to see any reversal of the trend without reforms to the bargaining systems and freeing unions from restrictive “anti-organising laws”.

    “What it says, for me, is that bargaining rights are out of reach for the vast majority of private sector workers.”

    Nonetheless, Pennington says that private sector union membership is unlikely to fall further than what she believes to be levels already below 10%.

    And on a positive note for unions, she argued the Changes the Rules campaign was successful in terms of recruiting members, with some unions doing “a lot better than others”.

    Union campaign heard: Stanford

    Centre for Future Work director, Professor Jim Stanford, also said the ACTU campaign succeeded in its first aim to “influence the debate” in the lead-up to the election on wage stagnation, work exploitation and job security.

    “Now the question is how do convert that public opinion that workers need fairer treatment into policy reform given the government that’s in power,” said Stanford.

    “That will be challenging, but it’s not impossible because the Coalition has to keep an eye on where people are at.”

    Stanford said the Coalition could not be “deaf” to public opinion on wage stagnation and job security, and the same was true for the FWC, which last year awarded a 3.5% in minimum wages.

    “I think they [the Commission] heard the concerns about wage stagnation and they recognised they had a role to play.

    “I think the public education and organising that the union movement did will still pay dividends, even with a generally hostile government in power.

    “The wage crisis is not going to go away and I think Australians are well aware are that their pay packers are going nowhere relative to consumer prices.

    “That combination of continued wage suppression with an awakened, angry population … is a pretty potent mix.”

    ‘Remain bold,’ Forsyth tells ACTU

    RMIT University’s Professor Anthony Forsyth has argued on his blog that unions can still tap into “deep problems” in the workplace that Labor sought to address.

    These problems included underpayments, “dodgy” labour hire contractors, workers trapped in long-term casual engagement and the widespread use of rolling, fixed-term contracts.

    “We still have the collapse of collective bargaining in the private sector, and employer ‘work-arounds’ to avoid negotiating an enterprise agreement or get out of an existing one,” says Forsyth.

    “We still don’t have the basis for a real living wage.

    “Rather than shrinking back to a ‘small target’ strategy, as is now being contemplated in other policy areas, I reckon the ACTU should remain bold in its reform ambitions.

    “It should make a more substantive case for ‘changing the rules’ with strong underlying research that precisely measures the nature of the current problems (such as the nature and incidence of ‘insecure work’, a concept that business groups constantly debunk in the media).”

    But Forsyth argued that “organising and connecting with workers on the ground in new and innovative ways” are also essential, as shown by United Voice’s ‘Hospo Voice’ initiative and both the Young Workers Centre and Migrant Workers Centre at Victorian Trades Hall Council.

    “As the National Union of Workers and United Voice put it in the context of their current amalgamation proposal: ‘We need to change the rules, but we also need to change the game’.”

    The post Where To Now for Union Campaign? Workplace Express appeared first on The Australia Institute's Centre for Future Work.

  • Scourge Pricing: Understanding and Challenging Uber’s Business Model

    Her presentation discussed the historical, economic, and moral context for the rise of “gig-economy” businesses, such as Uber. She reviewed Uber’s business model, and the company’s recent IPO, in detail, arguing that it depends on underpayment of its drivers – who for all practical purposes are “employees,” even if current labour laws do not always explicitly recognise them as such.

    Growing competition, regulatory and legal problems, and growing resistance to the ultra-precarious and low-wage incomes offered in this type of work suggest that the future success of digital platform businesses like Uber is very much in doubt.

    Pennington also referenced findings of our previous paper estimating the net incomes of Uber-X drivers in 6 Australian cities.

    Please view Alison Pennington’s full presentation below.

    The post Scourge Pricing’: Understanding and Challenging Uber’s Business Model appeared first on The Australia Institute's Centre for Future Work.

  • 124 Labour Policy Experts Call for Measures to Promote Stronger Wage Growth

    The letter has generated substantial media coverage, including articles in the ABC, The Guardian, and The New Daily.

    A comprehensive story also appeared in Workplace Express, which we attached below with the journal’s permission. (To subscribe to Workplace Express for comprehensive coverage of labour policy issues, please visit their site.)

    Richard Denniss, Chief Economist at the Australia Institute, also tied the open letter into his powerful column on the causes of wage stagnation.

    The open letter was initiated and circulated by the 3 co-editors of a recent collection of research essays on the wages slowdown (The Wages Crisis in Australia: What it is and what to do about it, published by the University of Adelaide Press):

    • Prof. Andrew Stewart, John Bray Professor of Law, Adelaide Law School
    • Dr. Jim Stanford, Economist and Director, Centre for Future Work
    • Dr. Tess Hardy, Senior Lecturer and Co-Director, Centre for Employment and Labour Relations Law, University of Melbourne

    “There is a growing and legitimate concern in Australia over the erosion of real living standards. Boosting wage growth is the best way to reinvigorate the promise of shared prosperity that is essential to a healthy and productive society,” said Dr. Stanford.

    “This is not a problem that is going to fix itself”, added Professor Stewart. “We need to see a policy response from governments at all levels – and an acceptance that lifting wage growth can help the economy, not harm it.

    Dr. Hardy said, “The problem of stagnant wages is a complex one. While there is no singular or straightforward solution, it is increasingly clear that combatting the current wages crisis will require concrete and decisive action.”

    Included among 124 co-signers of the letter are numerous distinguished policy experts, including:

    Prof. Roy Green, Emeritus Professor, Innovation Adviser, and former Dean of Business School, University of Technology Sydney: “In current conditions, wage increases can be a significant driver of growth and productivity through the incentive effect on capital investment, and the demand effect on capacity expansion. Keeping wages depressed is not only disadvantageous for workers but it is bad for business and the wider economy.”

    Prof. Sara Charlesworth, Distinguished Professor of Gender, Work and Regulation in the School of Management at RMIT University: “Wages fully reflecting the value of the work women undertake are vital to their well-being and fundamental to gender equality.”

    Prof. John Quiggin, ARC Australian Laureate Fellow, School of Economics, University of Queensland: “For decades, government policy has been designed to weaken unions and push wages down. It’s time to put that process into reverse.”

    The post 124 Labour Policy Experts Call for Measures to Promote Stronger Wage Growth appeared first on The Australia Institute's Centre for Future Work.

  • Million jobs not what it used to be: new report

    New analysis of labour market performance released today by The Australia Institute’s Centre for Future Work, shows Australia’s job creation performance over the past five years has been weak relative to population growth and compared to past periods of history.

    “A million jobs in five years sounds like an impressive figure, but there are now over 20 million Australians of working age, and our population is growing very rapidly. A million new jobs every five years, isn’t even enough to keep up,” says Dr. Jim Stanford, Director of the Australia Institute’s Centre for Future Work.

    “A closer look at the evidence shows that both the quantity and the quality of work being created in Australia’s labour market is inadequate to the needs of our growing population, and highlights the role part-time work has played in inflating the apparent total number of jobs created.

    “Part-time employment has accounted for almost half of all new work created since 2013. Without the this rapid expansion of part-time work, which converts a given amount of hours of work into more jobs, the growth in employment would have fallen well below one million.

    “Due to soaring part-time employment, the number of hours worked by each worker has fallen to the lowest on record. Part-time workers also experience lower hourly wages, higher casualisation, and are more dependent on the minimum conditions of modern awards.

    “Along with the declining quality of jobs, our research shows an unprecedented stagnation of wages since 2013. With nominal pay lagging behind inflation, the real purchasing power of Australian works has declined for the first time since the recession-wracked 1990s.

    “This deterioration occurred in a time when the economy was growing steadily. Instead of constituting some kind of economic triumph, the last five years really represents a lost economic opportunity.”

    The post Million jobs not what it used to be: new report appeared first on The Australia Institute's Centre for Future Work.

  • Rebuilding Vocational Training in Australia

    Ironically, the manufacturing recovery could be short-circuited by looming shortages of appropriately skilled workers. This seems unbelievable — given so much downsizing in manufacturing employment that occurred between 2001 and 2015. But a combination of structural change within the sector, the ageing of the current workforce, and the failure of Australia’s vocational education system (crippled by a bizarre experiment in publicly-subsidized private delivery) means that recovering manufacturers may be unable to find the skilled workers they need.

    A recent feature article in Australian Welding magazine highlighted the Centre for Future Work’s research into the problems of the current VET system, the implications for manufacturing, and 12 key reforms urgently needed to repair the situation.

    The feature article is extracted from a detailed paper (co-authored by Tanya Carney and Jim Stanford) on the evolving skills requirements of the manufacturing sector, and the failure of a privatised, fragmented VET system to meet those needs. That paper was unveiled at the 2018 National Manufacturing Summit in Canberra.

    “Stable, well-funded, high-quality public institutions must be the anchors of any successful VET system. Public institutions are the only ones with the resources, the connections, and the stability to provide manufacturers with a steady supply of world-class skilled workers.”

    Please see the full 4-page article in Australian Welding magazine with our proposals for rebuilding a high-quality, modern VET system to meet the needs of manufacturing and other Australian industries.

    We are grateful to Australian Welding and Weld Australia for permission to reprint this article!

    The post Rebuilding Vocational Training in Australia appeared first on The Australia Institute's Centre for Future Work.

  • Industry-Wide Bargaining Good for Efficiency, as Well as Equity

    In this commentary, Centre for Future Work Associate Dr. Anis Chowdhury discusses the economic benefits of industry-wide collective bargaining. In addition to supporting wage growth, industry-wide wage agreements generate significant efficiency benefits, by pressuring lagging firms to improve their innovation and productivity performance. The experience of other countries (such as Germany and Singapore) suggests that this system promotes greater efficiency, as well as equity — although other wealth-sharing policies are also needed.

    Dr. Chowdhury’s full comment is posted below.

    INDUSTRY-WIDE BARGAINING CAN BOOST EFFICIENCY AS WELL AS WAGES

    by Dr. Anis Chowdhury

    In an effort to reverse long-term wage stagnation, the ACTU is calling for an end to current industrial rules which effectively prohibit sector- or industry-wide wage bargaining. Predictably, the business community is opposed. Australian Industry Group chief executive, Innes Willox, said, “The ACTU’s latest proposals would destroy jobs and the competitiveness of Australian businesses…If the ACTU got its way, unions would be able to make unreasonable claims and cripple whole industries and supply chains until employers capitulated.”

    No doubt, the issue will be a hot topic in the upcoming Federal Elections. The Labor Party conference is debating the ACTU’s call. And the Liberal-National Coalition will surely accuse Labor of capitulating to the vested interest of the union movement.

    Mr. Willox’s claim that the sector-wide wage bargaining would destroy jobs and Australia’s competitiveness has no basis. A powerful example is provided by Germany, Europe’s strongest economy. In Germany, wages, hours, and other aspects of working conditions are decided by unions, work councils (organisations complementing unions by representing workers at the firm level in negotiations), and employers’ associations. Collective wage bargaining takes place not at the company or enterprise level but at the industry and regional levels, between unions and employers’ associations. If a company recognises the trade union, all of its workers are effectively covered by the union contract.

    Yet, Germany’s competitiveness did not decline. On the contrary, Germany experiences both strong productivity growth and strong wage growth. Despite ongoing real wage improvements, unit labour costs are stable or even declining – further enhancing Germany’s competitiveness.

    How is this possible? The answer was given by more than half a century ago by two leading Australian academics – WEG Salter and Eric Russel. By de-linking productivity-based wage increases at the enterprise level and adhering to the industry-wide average productivity-based wage increases, an industry bargaining system raises relative unit labour costs of firms with below-industry-average productivity, thereby forcing them to improve their productivity or else exit the industry. At the same time, firms with above-industry-average productivity enjoy lower unit labour costs, hence higher profit rates for reinvestment. Singapore also used this approach to restructure its industry in the 1980s towards higher value-added activities, with great success.

    Trying to compete on the basis of low wages is a recipe for failure. As a matter of fact, low-wage countries typically demonstrate lower productivity; and research by a leading French economist, Edmond Malinvaud, showed that a reduction in the wage rates has a depressing effect on capital intensity. Salter’s research implies that the availability of a growing pool of low paid workers makes firms complacent with regard to innovation and technological or skill upgrading. Other researchers show that under-paid labour provides a way for inefficient producers and obsolete technologies to survive. Firms become caught in a low-level productivity trap from which they have little incentive to escape – a form of Gresham’s Law’ whereby bad labour standards drive out good. The discipline imposed on all firms as a result of negotiated industry-wide wage increases forces all of them to innovate and become more efficient.

    So, sector-wide wage bargaining is good for the economy: favouring efficient firms, stimulating investment, and lifting wages. Of course, industry-wide bargaining alone cannot solve all the problems of wage inequity or wage stagnation. It must be part of a broader suite of policy measures, to provide all-round support for greater equality and inclusive prosperity.

    In particular, we must address the system that produces sky-rocketing executive pays at the expense of workers. A lower marginal tax rate is one of the incentives for the executives to pay themselves heftily, while tax cuts are not found to boost growth or employment. Share options for CEOs, which encourage job cuts and discourage re-investment, also must be reined in. If anything that is making the Australian economy vulnerable, is growing economic disparity between self-serving executive compensation and stagnant wages for the rest of the population.

    Reforms also need to address the macroeconomic policy paradigm, where fiscal policy is focused on creating needless budget surpluses by cutting social services and public infrastructure investment. Meanwhile, monetary policy is focused on a pre-determined inflation target regardless of the economic cycle. All of this stifles economic growth prospects and increases job insecurity – both of which are detrimental for wage recovery.

    The post Industry-Wide Bargaining Good for Efficiency, as Well as Equity appeared first on The Australia Institute's Centre for Future Work.

  • Are States Filling the Democratic Void?

    The recent Victorian election results showed Australian voters want governments to play a pro-active role delivering public services, infrastructure, improved labour standards, and sustainability. They showed that in a time of deep cynicism with federal politics, States (and Territories) can play an important role filling the democratic void left by dysfunction and policy paralysis at the Commonwealth level.

    This commentary from Alison Pennington, economist at the Centre for Future Work, explores what the energetic campaign in Victoria revealed about our unique system of dual governance and the potential for pro-active and progressive policy making. This commentary was originally published in New Matilda.

    The Victorian election: Are states filling the democratic void?

    A destructive and cynical politics is on the rise across the world with emergent right-wing populism a warning of what happens when people lose faith in political institutions.

    In Australia, the Coalition government has been characterised by ongoing austerity, the retrenchment of public resources and capability to the tune of billions of dollars, but complete paralysis on just about every other policy reform (most visibly including massive inconsistency on energy and climate policy). This has led to a democratic void in Australian society.

    Meanwhile, the recent victory of the Andrews Labor government on a bold social democratic platform of long-term investments in services, education and infrastructure projects (some with a 2050 completion date) gave Victorians a secure, positive vision of a more balanced, stable society – and voters endorsed that vision strongly.

    How is it that these two wildly different scenarios of political life can exist alongside each other?

    Many commentators have explained the Victorian election result as a mere by-product of the Coalition’s ongoing crisis (with subsequent warnings about the future of the federal Liberals). But this suggests Victorians were motivated by cynicism alone. In reality, Victorians rallied enthusiastically around a constructive, hopeful vision of State-level policy-making. Indeed, since federation, Australian communities and regions who have identified needs and desires unmet by the Commonwealth, have often turned to the state level of governance to get things done.

    The unique organisation of governance in Australia, featuring a Commonwealth composed of somewhat independent States and Territories, has preserved a realm of Australian democracy distinct from the national level of affairs. At a time of deep cynicism with federal politics, the Victorian election result shows that States can fill the democratic void left by dysfunction and tribal politics at the Commonwealth level, strengthening Australian democracy and saving it from the worst of cynical politics we see emerging elsewhere (such as Trumpism in the US).

    Where does the legitimacy of this State-based democracy come from? Despite losing (or handing over) many of their powers to the Commonwealth over time, States still retain power to administer the key public goods that Australians most value: like education, health care, civic services, and culture. These are the functions of government that people will energetically defend when they are undermined.

    While the Australian constitution allocates responsibility for big-ticket public programs like healthcare and education to the States, the Commonwealth retains powers to raise the bulk of the revenue needed to fund these expensive services. This means States operate in a contradictory financial bind: always dependent on the federal government to honour the financing of essential services that the States are constitutionally bound to provide. This gives enormous economic and political power to federal governments— a power play that has been repeated many times over Australia’s history.

    For example, a recent attempt by the Commonwealth to undermine the funding of public goods under the ‘spend within your means’ mantra was mounted in 2016, when Malcolm Turnbull and Scott Morrison tried to shift responsibility for raising revenue for public services to States. This was done without relinquishing any of the Commonwealth’s income and corporate taxation powers – all the while overseeing billions of dollars in cuts in healthcare and education in the federal Budget.

    But the constitutional and financial bind faced by State governments has gained particular significance in recent years, as decades of ‘small government’ policies wound back public services in favour of highly-subsidised private models have come to a head. Publicly-subsidised private markets in aged care, disability care, healthcare, education, VET and childcare have all been proven failures: both in the quality of services delivered, and in the standards of employment for those doing the work.

    Recent polling by the Australian Institute shows that 64 per cent of Australians want an increase in public spending funded by tax revenue from wealthy individuals and high-turnover businesses. Australians value government provision of public goods, even more than personal income tax cuts. The failure of federally-backed market experiments within spheres of life where Australians demand a proactive and productive government role, has left the political field wide open – and States are in prime strategic political terrain to fill that space.

    State action is applauded in the face of Commonwealth inaction. For instance, amidst recent turmoil in federal energy and climate policy, the Victorian, SA and ACT governments have proactively invested in renewable energy industries. And State governments in Victoria, SA, ACT and QLD have found innovative work-arounds to protect workers from new exploitative labour practices, despite the dominance of the Commonwealth in the jurisdiction of labour law: including labour hire licencing schemes, mandated minimum pay and safety conditions, and a new inquiry just launched into on-demand ‘gig’ work and its implications for the Victorian economy.

    The Victorian election results provide another clear insight into what Australians value and what they will tolerate. They confirm that Australians care about a fair society – underpinned by the public provision of healthcare and education (including a revamped TAFE sector), new infrastructure, action on renewable energy, and employment conditions that allow Australians to live a decent quality life.

    With the Andrews government’s pledges for sizeable investments in all of these endeavours ratified so strongly by voters, it shows that the failure of Commonwealth policy and politics can be mitigated by popular, publicly-minded campaigns at the State level.

    A future federal government could build on the example set by the Victorian election. It could use its much stronger policy and fiscal levers to charter a course that addresses the growing labour market power imbalances, restores the billions cut from hospitals, schools and housing, prepares our economy for a renewable energy future, and delivers a comprehensive program of tax reform.

    But until that decisive break with the failed austerity and cynicism of recent federal politics, the Victorian election results confirm that in the meantime, States can step firmly into the breach. They can and must continue to function as a key site for the expression of Australians’ demands for a more equal, inclusive, participatory society, with a proactive role for government in delivering public goods.

    The post Are States Filling the Democratic Void? appeared first on The Australia Institute's Centre for Future Work.