The Reserve Bank should use interest rates to push for full employment, and the government should introduce controls on energy prices to curb inflation, according to a report commissioned by the ACTU ahead of next month’s jobs summit.
The report, by the head of the Centre for Future Work Jim Stanford, proposed six big changes to Australia’s economic structures. These also included reforming the industrial relations system to give workers more clout to bargain “for their fair share of our national wealth”, a windfall tax on companies enjoying huge profits as a result of current inflation, and cancelling the planned Stage 3 tax cuts.
Labor has invited Peter Dutton to its September jobs and skills summit in what the treasurer, Jim Chalmers, is calling a sign the federal government is serious about finding common ground.
The invitation, issued on Tuesday to Dutton or an alternative member of the opposition, is part of a push for a representative summit of employers, workers and community representatives to discuss unemployment, productivity and incomes.
Ahead of the summit, employer groups are seeking a boost to migration while Chalmers himself will “recommend immediate actions and opportunities for medium and long-term reform” as well as inform the employment white paper.
Formal invitations for the event, limited to just 100 participants, will be sent out from this week, with issues papers to follow on topics including skills, migration and workplace relations.
Chalmers said the government was “serious about bringing people together from right across the community to find common ground on the key economic challenges”.
“There’s plenty of goodwill out there and a real appetite for cooperation,” he said.
“That spirit of cooperation can extend to the opposition if they are willing to accept it, and I hope they will.”
The shadow treasurer, Angus Taylor, has at times derided the event as a “gabfest” but has also insisted the opposition and other parliamentarians should be invited. The government said it would ensure interested members of the crossbench also had an opportunity to participate.
Chalmers said the event was “a working summit, not a soiree” and participants should “roll up their sleeves and bring fresh ideas to the table”.
Fresh ideas have so far included the ambit claim from the Australian Workers Union for opt-out union membership for foreign workers and higher fees for skilled visas to ensure reinvestment in domestic training.
The Reserve Bank should add full employment to its target when setting interest rates and the government should introduce some price controls to curb inflation, according to a report commissioned by the ACTU ahead of next month’s jobs summit.
The ACTU commissioned the report by Stanford as the first in a series in the run-up to the summit. .
“Our top economic goal as a nation should be to give everyone the chance to get a secure and fairly paid job,” ACTU’s secretary, Sally McManus, said.
Real wages are now back to 2010 levels, the report noted, with the trend accelerating as inflation grows faster than pay. June quarter wage price index data, due out on 17 August, may show salaries rose at half the 6.1% annual pace of consumer prices.
Stanford said the past decade was marked by weak business investment, stagnant real wage growth and a “dramatic imbalance” as labour’s share of GDP fell to record lows while profit’s share hit record highs. Over the past 12 months alone, the level of profit extracted per unit of output had risen 14%, compared with just 2% for labour costs.
“Arguing that the way to solve the current inflation is to suppress wages when wages didn’t cause the problem is a cognitive disconnect of the highest order,” he said.
The report recommends making full employment the “top economic goal” and amending the RBA’s mandate to make it one of its targets. The bank’s current practice is to use interest rates to keep inflation within a 2-3% range over the medium term.
The RBA would be required to work with other government agencies so the “sledgehammer” of changing the cash rate was complemented with other tools, such as using prudential standards to limit “unproductive” loans, Stanford said.
The report also recommended cancelling stage the three tax cuts and restoring collective bargaining. The employment minister, Tony Burke, has signalled he is willing to consider relaxing the rules around multi-employer collective bargaining.
