Be wary of push for taxpayer handouts and regulatory favours PUSHERS, poseurs and rent-seekers will use every trick in the book to make their points. A calm, detached or empirical presentation, perhaps, or maybe something emotional, subjective, even hysterical — whatever it takes to win the argument, which often involves taxpayer handouts or regulatory favours. A new much-loved tactic of the pleading set is conflation. Taking distinct concepts as if they were one, the trick is to use a relationship that applies to one of the variables as if it applies more generally. By confusing the target audience, the aim is to achieve endorsement of a point of view that is not actually supported by the evidence. To illustrate how this logical sleight of hand works, let me give three public policy examples: • The threat of removing penalty rates for agreement-covered professional workers, such as nurses and paramedics, to boost the case for retaining penalty rates more generally. • Using the case for government funding of formal childcare for children from extremely disadvantaged backgrounds to support the spending of billions of taxpayer dollars on all childcare. • Using the support for the small-scale renewable energy (rooftop solar panels) to make the case for the large-scale renewable energy target. Consider the first. When we think about the economics of penalty rates, paying a premium to employees to work at certain times of the day or week may be necessary to induce them to work at those times. To entice workers with specific skills that have been acquired through years of education and training, it is likely employers will need to pay penalty rates for weekend and public holiday work. With few exceptions, penalty rates for these workers are stipulated in agreements, not awards. The contrast is with industries such as retail, restaurants, hotels, fast-food outlets and the like in which many of the workers are relatively low-skilled and the potential workforce is large. While these industries generally require some workers to work in out-of-standard hours, for many these hours actually suit them. For school and university students and mothers with young children, for instance, working on the weekend or on a public holiday may well be their preferred arrangement. Workers in these industries are generally covered by awards, which provide one-size-fits-all arrangements that are not identical across awards. And here is the conflation. Whenever there is a discussion of the case for changing award-specified penalty rates, the question is raised: but what will happen to nurses and ambos? You won’t be able to get them to work on weekends or public holidays without offering penalty rates. The fact their conditions of employment are stipulated in legally binding agreements is never mentioned. Nor is the fact, in the event of an employer being unable to attract workers to work at certain times, there is always scope to offer higher rates of pay. This is the economically efficient outcome in which employers match the required supply price, while retaining the appropriate incentives to operate during non-standard hours. Further:theaustralian.au/opinion/columnists/be-wary-of-push-for-taxpayer-handouts-and-regulatory-favours/story-fnbkvnk7-1227066890457
Posted on: Mon, 22 Sep 2014 20:23:50 +0000
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