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John Howard's New Fair Pay Man

by Jack H Smit
Project SafeCom

Ian Harper, John Howard's new Fair Pay Commissioner, is an Anglican who's on God's side, and he's been pretty open about it since his appointment. It seemed a bit up in the air at the time, but Australian reporters let him have his day in Heaven when he was first appointed. Now, it seems, Mr Harper may know more about God than about the Australian history of Industrial arbitration, a discovery probably first made through Sydney-based blogger Evan Jones - on his Alert and Alarmed Blog - and further brought to the public domain by the folks of ABC Radio's PM program this week.

Because Harper is not a Catholic like the Pope, he may be forgiven for not having heard of Leo the 13th, or for not having read this Pope's 1891 Rerum Novarum. From an online explanation of the Pontiff's wise words:

Rerum Novarum is an encyclical issued by Roman Catholic Pope Leo XIII on May 15, 1891. It was an open letter to all the bishops that addressed the condition of the working classes. Leo supported the rights of labor to form unions, but rejected socialism and affirmed private property rights. He discussed the relationships between government, business, labor, and the church proposing a social and economic structure that was later called corporatist.

The Pontiff's New Case was used by Australia's Arbitration Commissioner Henry Bournes Higgins. In 1907 Higgins stated that the minimum wage for Australians "must be enough to support the wage earner in reasonable and frugal comfort".

The Harvester Judgement, as the case before Higgins is known, established the Australian Federal and later also State notion of a 'fair and reasonable wage'. The Harvester Judgement was a central moment in the history of Australia and it created one of the central planks in our way of life. So important was the Harvester Judgement that I had to learn about it in my first year as a social work student in Western Australia.

Commissioner Higgins noted during the case:

I regard the applicant's undertaking as a marvel of enterprise, energy and pluck ... he is allowed - if my view of the Act is correct - to make any profits that he can and they are not subject to investigation. But when he chooses, in the course of his economies, to economise at the expense of human life, when his economy involves the withholding from his employees of reasonable remuneration, or reasonable conditions of human existence, then, as I understand the Act, Parliament insists on the payment of the Excise duty.

But, credit where credit is due: God and Howard's Fair Pay man Ian Harper has also heard of the Harvester Judgement. In 2002 he writes in Policy, the magazine of the Centre for Independent Studies about this case against Hugh Victor McKay of the Sunshine Harvester Company:

Higgins' judgment is famous because it established a precedent for calculating the 'basic wage', defined as sufficient to meet 'the normal needs of the average employee regarded as a human being living in a civilised community'. Justice Higgins arrived at the figure of seven shillings per day by setting down the weekly expenses that he judged necessary to keep a family of two adults and three children living in what he considered to be a civilised condition. Significantly, the decision was made without reference to the employer's ability to pay - in other words, without reference to the underlying productivity of the labour being paid the basic wage.

But then, in his next paragraph, Harper starts distorting the facts to suit his argument:

Far from obtaining relief from excise duties, McKay faced an increase in his wages bill estimated at 25%. The Sunshine Harvester, the pride and joy of the company and a strong contender in export markets for agricultural equipment, never realised its potential. The company eventually ceased manufacturing in Australia and entered an agreement with the Canadian multi-national, Massey-Ferguson-Harris, to distribute Canadian-built harvesters in Australia. In 1955, the company sold out to the Canadians and became Massey-Ferguson (Australia). But for the Harvester Judgment, Massey-Ferguson might now be known as the McKay Harvester Company. Australia> may have lost more than a homegrown harvester - we may have passed up the chance of owning a multinational agricultural equipment manufacturer!

As the folks on the Alert and Alarmed Blog note:

"… he makes the remarkable claim that Higgins' Harvester judgement imposed such an increase in wage costs on McKay Harvester that it fatally damaged its prospects as a successful Australian manufacturer, eventually leading to its takeover by Canadian Massey Ferguson in the 1950s."

"In fact, McKay never had to pay the wage Higgins set. It appealed to the High Court, which overturned Higgins' decision on the basis that the Excise Tarriff Act was unconstitutional. The following year, drought led to hard times for the agricultural implement industry, and over half of the workers at Sunshine were laid off. The agricultural implement union, bankrupted by its ongoing battles with McKay, didn't get to the Arbitration Court again until 1925."

Sorry, Mr Harper - it just didn't stick. Drawing suitable conclusions contradicted by historical facts is a dangerous game. You made it clear that you were unhappy with the "significant" aspect of the Harvester judgement: "the decision was made without reference to the employer's ability to pay - in other words, without reference to the underlying productivity of the labour being paid the basic wage", but that's the way God decided it to be for Australia. You know, God - in this case and in the case of Leo the 13th, the God of the humblest of workers - was there before you came along.

Harper does not leave it there. As the folks of PM summarise:

PM has unearthed a paper by Professor Harper, which condemns the concept, established in the famous Harvester Judgement of 1907, of a "fair and reasonable" wage.

The Fair Pay Commission's boss also expresses approval for wage rates paid in the sweatshops of lower Manhattan some time ago. And he argues that low-skilled workers should be paid rates commensurate with their low productivity.

From Harper's next paragraph:

Other countries, notably the United States, also faced the dilemma of developing beyond a highly productive primary sector. In the US case, they were also keen to grow their population through immigration, although not for defence reasons. The key difference between such cases and our own is that other countries did not try to divorce wages from the low levels of productivity characteristic of high-employment manufacturing industry. Employers in the sweatshops of lower Manhattan were not obliged to raise wages to 'fair and reasonable' levels. While this is no doubt partly responsible for the wider dispersion of wages in countries like the United States compared with Australia, growth of manufacturing industry in the United States did not require the systematic intervention from government which became the hallmark of attempts to nurture manufacturing in Australia.

Thanks, Mr Harper, for telling us where you stand. Now we know why you were chosen by Australia's Prime Minister John Howard. You share the same God with Howard - the God of the Anglicans - and you also have the same Golden Calf hypnotising you in your living room - the Golden Calf of Big Business and The Economy. High productivity, this Golden Calf's sweet milk, precedes and if need be, precludes universal human rights for workers. You were appointed because Howard seeks to undo all that was achieved in Australia since Industrial Arbitration.

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Breaking news on Harper

Wage chief's business dealings questioned (ABC):

The AM program reports that Professor Harper was the director of a company that went into administration owing more than $700,000 to its workers. The company went broke after allegedly trading while insolvent. The administrators found there was an arguable case that the directors had breached criminal offences under company law.

BUT ... The head of the new Fair Pay Commission was a non-executive director of the ADX, and as such, he probably would not have been involved in the day-to-day running of the company.

Questions over Fair Pay head (News Ltd):

THE head of the Federal Government's new Fair Pay Commission was a director of a company that went broke, owing workers more than $700,000, according to a report.

There were also concerns that the company of which economist Ian Harper was a director may have breached corporations law.

BUT ... It is not known whether the Government knew of Professor Harper's involvement with ADX when it appointed him to the commission.

Fair Pay head's firm 'went broke' (Smage):

Same as the News Ltd.  Media diversity - don't you love it?

Harper is at fault

Craig: "BUT ... The head of the new Fair Pay Commission was a non-executive director of the ADX, and as such, he probably would not have been involved in the day-to-day running of the company."

Executive director or not, being part of the board he has/had responibilities including ensuring the company was solvent. The, "I did not know, nobody told me" excuses are not good enough. Board of the NAB (executive and non executive members) know that well.

"BUT ... It is not known whether the Government knew of Professor Harper's involvement with ADX when it appointed him to the commission."

This would be a basic mandatory enquiry prior to the appointment. Any current or previous board appointments could potentially lead to conflict of interest. If the government did not know than I would strongly question the ability of the government to appoint the "right" person.

Their buts not mine

Surjit,  just to clarify, they were the "but" statements made in the sources (ABC, News Ltd, and Fairfax newspapers) not mine.  I agree with your views on each of those "but" statements.

Fair Pay commission a sop

All those who are carrying on about the "Fair Pay Commission" were probably strangely quiet during the workings of the Industrial Relations Commission under Labor and the Accord policy.

During the operation of the Accord, real wages in Australia fell and unemployment increased. So where was the protection for employment and wages it was supposed to provide to Australian workers.

The new Fair Pay Commission will be similar if given the same sort of powers. Thankfully it won't. It will just be a waste of money and a sop to those who yearn for the central control of wages.

Howard once said that he would not act like the ALP and stab the IRC in the back. He was quite open and said he would stab it in the front. It's taken 10 years of obstruction, but at last he has some success. If the Fair Pay Commission manages to set minimum wages above the market rate it will only succeed in creating more unemployment for those least skilled in the community.

Those who deplore "the market" will continue to do so, but it will not go away. The market like gravity cannot be wished away. Like ignoring the existence of the force of gravity, ignoring the existence of the market has serious consequences.

Lower Wages - more likely than not

The treasurer and the government has been caught out again. It appears that analysis from treasury confirm that wages growth is likely to be lower under the fair pay commission than under the previous commission. In addition, and Peter Costello agrees, the productivity increases will be difficult to measure and employment growth will be marginal.

Now I am certain that some of my taxes were spent "explaining" how these changes will be good for everybody with higher wags, higher employment and higher productivity. I guess that was the "advice" the government had at the time or "they were not informed" or "it is not our belief and we do not agree with the analysis". Excuses galore and more to come.


Hey Surjit and Bob, it truly turns my stomach to see and hear Howard and Costello playing stupid little games with words. We all know what Costello said in Parliament and he was crowing about it as well, thinking the revealed document would not be released.

How do they sleep at night?

The trouble is there are enough morons in this country that will simply believe what they are saying and applaud them for "being clever". Absolutely sickening. You wouldn't let a three year old lie as they are doing, and not just now either. No offence to three year olds.

And yet, as Surjit says, where is the alternative? Swan or Costello? Sorry, I choose neither. Until Labor retires Kim, removes most of the current front bench and starts recruiting people who have some guts we are destined to live in Howie land until his wooden box arrives at Parliament House to collect him. He'll outlast Costello for sure. Anyone for the first 100 year old PM?

Wouldn't it be good if all the barrackers for both major parties actually had the often suggested cold shower and looked at their "leaders" to see what they really are? There's no other word for it really. Arseholes.


Ross, spot on. Barrackers indeed. Some seem to think everyone has to pick a party as if it were a football game and support them no matter what. Hence when the answer to a question is a government that upholds the principles and practices of democracy they do not understand.

If the cold showers were taken and the electorate abandoned blind obedience and resolved to punish governments that did not uphold the p & ps mentioned above then there would be a change. Not voting for them is a very effective punishment. You will recall various discussions at WD about other means.

Who would you like as

Who would you like as Treasurer, Costello or Swan?

If you answer Swan, you deserve everything you get.

Never mind it's all hypothetical, Labor could not win a chuck raffle.

Costello's swan song

I don't think we deserve everything we get from this government.

Who would you like as -Syd

It always amazes me how if someone is critical of one side of politics that most assume that the person supports the other side. In my opinion the performance of Labor has been dismal and they do not deserve to be in government.

I am however most disappointment at the performance of Howard and his minsters with regards to decency, truthfulness, support for its citizens and particularly the inability to admit "I/we were wrong - I/we made an error". It is always "I was not told" or "I was not aware" - it's not someone else's fault. If you are the leader and you let matters slip - be an Aussie and take it on the chin and move on.

Costello caught out

Surjit, here is the transcript from this morning's AM.

An extract:

'PETER COSTELLO: Well, the … what's on the front page of The Australian today is a minute from the Treasury which has been publicly released and which is available for people, anybody, to read.

What it does is it makes the case for workplace relations reform, and it finds that workplace relations reform will not only lift productivity, but it will lift employment. It cites the reasons for that and it cites all of the findings of international bodies such as the IMF, the OECD, which have consistently argued that labour market deregulation is positive for an economy, for productivity and for employment.

CATHERINE MCGRATH: Well, just a minute, you told Parliament that that advice didn't exist.

PETER COSTELLO: No, no, no, no. The Treasury did not commission a secret report in relation to modelling.

CATHERINE MCGRATH: Well, just a minute, I think you're playing with words here, aren't you? You were asked whether there was information about it, whether Treasury had investigated the economic benefits. You said no.

PETER COSTELLO: I'm sorry, Catherine, but a report was carried in The Australian on the 5th of November 2005 which said that there had been specially commissioned advice from the Treasury and, Catherine, not me, the Treasury, put out a statement saying that there hadn't been specially commissioned advice from the Treasury in relation to that, and that was a statement by Dr Martin Parkinson on the 5th of November …

CATHERINE MCGRATH: I've got that in front of me, actually. It does sound like a lawyer's defence though. I mean, you were asked in Parliament about economic advice from the Treasury. What's printed in The Australian today looks, to most Australians, like economic advice from the Treasury.

PETER COSTELLO: No, no, Catherine, the question was about modelling, there was evidence in the Senate Economics Committee, and the Treasury itself put out a statement, not me, the Treasury itself put out a statement which said that that report in The Australian was not accurate.

Now, what's been released today is a minute, which was not especially commissioned research or modelling, but a minute which gathers together all of the economic case in relation to the importance of labour market deregulation.

It's been released to The Australian. These are not secret, it's been released, and it can be read by anybody, which gathers together the international research from the IMF, the OECD and everything else that's …'

People can judge for themselves but it does seem par for the course.


Great piece Jack.

 I wonder if anybody else feels that these measures to shift power to the employers will inevitably backfire and result in a further unionising of the country?

God & Mammon

The cards have definately fallen right into Howies time. A very good friend  from Sydney blames Gough Whitlam & Al Grasby for all the  Lebanese problems, as they  were the ones (apparently, as told by a shock jock) that allowed migration from that part of the World (she also thinks Alan Jones is so good at getting to the bottom of things).

Howie has already made an ass of himself with the appointment of a man of the cloth to GG. Can this have the same repercussions, when the people see how fair Harper is and start to worry about their mcmansions, forgetting about  interest rates.

Fair Pay, Man!

Jack, please don't tar all Anglicans with the same brush. On second thoughts, I can now identify with my second-generation Lebanese friends. Lesley de Voil 'Strive for justice and peace among all people, and respect the dignity of every human being.'

Fair Pay and the Easter Bunny

Hey Jack, good article mate. I'm continually amazed at the depth of research and breadth of knowledge many here have on various subjects. It's appreciated that people such as yourself take the time to analyse and report on such issues.

Mr Harper's belief in a God demonstrates to me a wonderful capacity to accept fiction as fact. The same sort of fiction that JWH has spun in creating the name of this new pay cutting organisation.

And I again applaud JWH on his consistency with appointments. Men of their own God are such suckers for grand titles aren't they? Wonder what colour his kaftan or robes will be. Any takers for purple?

Golden Calf

God is indeed now a political force in Australia for the well heeled.

Hillsong Church in my area is an unabashed Liberal supporter... our local member is a high profile member.

They require church members to tithe 10% of their wages (gross).

A conservative figure of 2000 members ( I understand they have many more) and an average wage of $500 p/w would equate to  $100k per week flowing into the coffers of this organisation from one congregation..

Makes the Catholic Church look like street corner beggars in comparison.

God & Mammon

I'm amazed at the success of Hillsong. That preacher of theirs doesn't convince me of anything. I certainly wouldn't buy a used car from him. So what's new with this appointment? Another US initiative. Why don't we just become another US state and cut out the middle man and give Kirribilli House over for weddings and public events? Save a lot of money and hot air.

God & Mammon

I am not amazed at its success. They preach the "greed is good" line. The rat bastards who lie and cheat and steal throughout the week can salve their conscience on Sunday by a bit of hypnotic happy clappy and throwing a wad of dosh in the collection plate.

God wants you to have the McMansion, the plasma, the jet ski... and it doesn't matter if you are a rude aggressive guided missile on the roads (I swear Western Sydney has this country's most dangerous drivers), it is of no consequence if you ignore the plight of the less fortunate. Wipe the slate clean by divesting yourself of a few bucks. The modern Americanised form of penance.

Of course they will kid themselves that they are doing good through their donations to the church. Have any of them stopped to ask where does the 100k plus per week end up?

It is fundamentalism for the individual.

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