Bert Kelly, “Back to ‘dog and stick’ farming,”
The Bulletin, March 5, 1985, p. 90.

At the Outlook Conference at the end of January, Australian Council of Trade Unions vice president Simon Crean spoke of the benefits of the wages accord — the deal between the unions and the Labor Party before Hawke’s election in 1983.

His speech must have been prepared during the Christmas holidays when there were comparatively few strikes.

Even while Crean was speaking, industrial turmoil was rife and how it has become worse. The accord has ceased to be the much-vaunted cure for industrial strife, if indeed it ever was.

Bad as things are now, Crean could claim that — without the accord — things would be even worse. In the short term he is right.

Criticising the National Farmers Federation stand against the centralised wage system, he said:

It may be a supportable economic theory that only those who make profits should pay higher wages, but we don’t live in a theoretical economy. We have to operate in the real world, conditioned by institutional factors, including the fact that comparative wage justice is very firmly entrenched in the Australian wage system.

Crean is correct when he says that comparative wage justice is firmly entrenched in our thinking and much time, effort and industrial strife will be needed before we uproot it. But the fact that a system is firmly entrenched, doesn’t make it right. Two-up is firmly entrenched too. Tariff protection was once a sacred cow until economic logic destroyed its base. A similar charge will eventually overtake comparative wage justice.

Under our wage system, if workers in, say, the oil refining industry winkle a wage increase out of their employers who may well be able to afford it, this increase must automatically go to brother workers in other industries, where employers may not be able to afford it.

Where does this lead us? The conference had just been told that a farmer’s average income was well below the national average. We did not expect to hear any demands for comparative income justice and are used to paddling our own canoe.

But the comparative wage justice philosophy also means that industries which cannot pay the increased wages won by the oil workers will not be able to employ people. This has been happening for years with farming. I used to have four permanent men on my place and how there is only one. Improved machinery and use of contractors has helped but we have been forced to cut corners on repairs, fencing, painting sheds and so on. We have reverted to what we call “dock and stick farming.”

We will last out. The people who will suffer are those who are not employed, the ones to whom we cannot afford to pay the sort of wages the oil industry pays. No doubt this suits the union members who make up the ACTU and who pay Crean’s salary. But the poor beggars who are unemployed because farmers and other groups cannot afford to pay them are the ones who suffer from comparative wage justice. No one worries about them; certainly not the ACTU.

There is another even more serious repercussion from our firmly entrenched wage thinking. While most farmers will survive by tightening belts and cutting corners, our ability to produce the exports that a developing economics demands will be damaged. Sir Roderick Carnegie made the same point later when he said that mining was going down the same drain with farmers. So the Australian standard of living will fall and we will continue to drop behind that of other countries whose people have been too busy to worry about everyone keeping in step.

Australians have a fetish about trying to make everyone equal which is the motive behind comparative wage justice. It is true we may be more virtuous if everyone is made equal. But I agree with Professor Hayek who said, when talking about the costs and benefits of equality:

At any given moment we could improve the position of the poorest by giving them what we took from the wealthy. But, while such an equalising of the positions in the column of progress would temporarily quicken the closing-up of the ranks, it would, before long, slow down the movement of the whole and in the long run hold back those in the rear. Recent European experience strongly confirms this.

The rapidity with which rich societies here have become static, if not stagnant, societies, through egalitarian policies, while impoverished but highly competitive countries have become dynamic and progressive, has been one of the most conspicuous features of the postwar period.

We will cling to comparative wage justice because it is firmly entrenched, even if it is bad for us.