The sugar hit from the Rudd government’s $10 billion stimulus package
should provide a timely jolt to an economy running low on energy, The
Australian said in its early Thursday morning edition.
Beyond that, Australia’s
chances of surviving the international downturn have been considerably
enhanced by the structural reforms introduced by the Hawke, Keating and
Howard governments. The same policies that helped accelerate the upside
will now help cushion the downside.
John Howard’s biggest
contribution to this task is likely to be the policy that contributed
to his downfall – workplace reform. His legacy is an industrial system
that built on the reforms of the Hawke and Keating years to bury
centralised wage fixing, and created flexible individual employment
contracts.
The reforms of the 1996 Workplace Relations Act,
enhanced a decade later by Work Choices, passed their first test during
the boom years when unemployment was reduced to 30-year lows. The next
test of Mr Howard’s workplace reforms is about to begin as the economy
and labour demand slow.
Unemployment is forecast to increase to
about 6 per cent in the short to medium term. But workplace agreements
unshackled from the rigidity of awards should make falling employment
less painful than in the last major slowdown in the early 1990s, when
it hit 10.8 per cent.
Employers and workers will have the
flexibility to negotiate reduced hours and pay in straitened
circumstances. That at least is the theory. The Australian said its bet
was that it will work.
The Daily Telegraph said that when bad news happened
overseas during previous eras, it would take the time of a ship’s
journey to reach Australia. “Once here, the news would make its way around the colony only as fast as a horse’s gallop.”
A
market collapse in New York City might then have taken months to become
widely known in Australia’s emergent business community.
Now,
bad news happens in real time, no matter where you are. Interlinked
economies rise and fall as one. Collapses (and recoveries) on Wall
Street are mirrored on the local stock market.
Likewise, we are now quickly feeling the material effects of those collapses.
In
an odd historical twist, schools run by the Catholic Church – not an
institution many would think of as ultra-modern – are among those which
have moved quickest to counter this very modern crisis.
This
should also serve as a wake-up call to many who imagine this downturn
will quickly pass. The Catholic school system is not prone to acting in
panic or haste.
All signs point to a struggle of some serious duration.
