The social wage has brought very real benefits to Australians, especially women, and these gains must be remembered when we look at the balance sheet in terms of recession and high unemployment.

The Social Wage And The Accord

In the ten years of the federal Labour Government, Australians have seen big improvements in the social wage, ie those aspects of our quality of life delivered not by employers, but by the federal government.


Those improvements have been delivered largely because of the Accord, the ongoing agreement between the trade unions and the government. In order to understand the social wage component, it is useful first to look at the Accord process.


The Accord is a uniquely Australian creation. Nowhere else in the world is there a government working in such close partnership with the trade unions. The Accord is now ten years old and has had several changes, of which the Accord Mark VII is the most recent.


The Accord is an agreement between the two wings of the Labour movement, the parliamentary wing, represented by the federal government, and the trade unions, represented by the Australian Council of Trade Unions. In the broad sense, it is an agreement to work jointly on all key issues in order to maintain economic growth and to create new jobs. In the more specific sense, the Accord spells out joint policies on economic matters, industrial matters and social wage matters, which are to be given priority from time to time.


During the period of the Whitlam Government, relations between the unions and the government were sometimes fraught, and the two sides sometimes made decisions which were to the detriment of the other. The Whitlam government did not have a wages policy and as a result there was a wage explosion which was ultimately counterproductive because it increased inflation and job losses.


Both sides of Labor reflected on this after the defeat of the Whitlam government. As a result, key people such as Jan Marsh at the ACTU and Ralph Willis who had moved from the ACTU to the parliament, drew up the Accord in the years preceding the 1983 election. Known as the “Statement of Accord by the ALP and the ACTU Regarding Economic Policy” it was aimed at pursuing an employment generating policy without creating a wages explosion.


Each subsequent renewal of the Accord agreement addressed macro-economic policies, wages policy (ie joint claims by the government and ACTU for national wage cases) and social wage issues. The general idea was that the unions would exercise wage restraint – they would not pursue the hefty wage increases which they could sometimes have achieved through industrial muscle – in exchange for raising the standard of living though other means, via the social wage, such as tax cuts, social security payments, health, housing, education etc.


These social wage improvements have helped all Australians, but particularly women.


The first element of the social wage is Jobs. The aim of the Accord was to trade off wage restraint for jobs, and for most of the past ten years that strategy was very successful. From 1983 to 1991 there were 1.6 million new jobs created, until the worldwide recession and local economic factors caused our own recession and high unemployment. What is not so widely know is that women have done much better out of the recession than men, in terms of employment. Of the 1.6 million jobs created in the 80’s, 60 per cent went to women, and of those jobs lost subsequently, many more have been “men’s” jobs than women’s. This is partly the worldwide issue of the restructuring of the workforce, as manufacturing industry declines (partly though new technology displacing workers) but the service sector grows, and the service sector employs more women than men.


Another little known fact is that although real wages have fallen through wage restraint and the recession, real disposable household income has increased. This is largely because more family members are working, mainly women. The influx of married women into the workforce has continued, even though the recession, and many families which previously relied on only one income now rely on two or three, with teenagers or adult children also earning.


With high unemployment, the issue of jobs is of course still the main feature of the Accord. The Accord Mark VII, drawn up and agreed just before the federal election, puts new jobs as the first priority. It promotes structural change through enterprise bargaining, retains the award system as a safety net, keeps inflation low, builds in wage restraint with any national wage increases going only to low paid workers, and links these strategies to job growth. It specifies that the creation of half a million new jobs over the 3 year life of the new agreement is an achievable minimum, and if job growth is slower than anticipated then the National Wage increases will be delayed.


A related aspect of the social wage is labour market policies to help the unemployed. Since 1983 the federal government has introduced a number of programs for subsidising wages and training for the unemployed, including the JET program to assist single parents (mostly women) into employment or training. The difference with previous labor market strategies is that theses are “active” rather than “passive” strategies designed to help recipients back into employment rather than just giving them income support in isolation.


Another important aspect of the social wage is Health Policy. The introduction of a universal health insurance scheme – Medicare – was a key plank in the first version of the Accord. Improvements have been made to Medicare over the years, with safety net provisions built in for lower income families. When the government talked about introducing a “co-payment” for visiting a G.P. the ACTU opposed the idea on the grounds that it would hurt low income people, who were already paying for health insurance through their medicare levy. In the recent elections, polls showed that women were particularly opposed to the Liberal’s policy of attacking Medicare, and it was one of the reasons why women switched their votes from Liberal to Labour as the campaign progressed.


Another social wage issue which is of great importance to women is Superannuation. When the Labour Government came to power in 1983, only one in four women workers had any superannuation because it was only paid out to employees who stayed with their employer for a lengthy and continuous period of employment. Through the Accord, the government supported the ACTU’s push for award superannuation, which brought superannuation to almost every workers, including women and even part-time and casual workers.


In 1992, the government introduced the Superannuation Guarantee Levy legislation which will require an employer to make a super contribution rising to 9% of wages by the year 2002, for every employee.


Superannuation paid by this method is “owned” by the employee from the day it is paid and is transferable if the employee changes jobs. It does not alter an entitlement to the aged pension. Women are those most in need of superannuation to boost their aged pension, because they live longer than men and in the past have been those most likely to live in poverty in old age.

Child Care

One of the most important social wage issues which has assisted women is Child Care. The federal government had no financial involvement at all in child care until the Whitlam Labor government. However, the real boost to child care has come though the Accord process, whereby the ACTU has continually made extra funding for child care a direct part of the wage negotiations. Since 1983 there has been an almost five-fold increase in government-subsidised child care places, and extra assistance for parents given though fee relief subsidies going to 65% of all families who use child care. The government’s new National Accreditation Scheme is another benefit, because it will raise the standard of care in child care centres.


As part of the latest Accord, the objective is to have 250,000 government-created places by 1995, and a total of 354,500 places by the year 2000. In addition, the Government has announced that it will introduce a 30 per cent cash rebate on child care fees for all working parents, in addition to the subsidies already paid for low-income and middle-income parents. Another initiative announced in the recent election was for parents who are not in the paid workforce but are caring for their children at home. For those parents, the Government will pay a Home Child Care allowance of $30 a week. Fee relief will also be increased for occasional child care used by parents who are not working.


The Accord partners are also committed to boosting work-related child care, especially child care subsidised by employers. Over 40 companies are now assisting their employees with child care, and measures are being taken by the government to push this initiative along. The ACTU is also pursing it along by encouraging unions to include child care is increasingly being placed on the table in negotiations.


Another social wage issue is Taxes. Throughout the Accord process, tax cuts have often been used as a trade off for wage increases by the Accord partners. The Labour Government has also initiated a number of measures to cut out tax rorts by the rich and to close tax loopholes. In the latest Accord, the partners are committed to further cuts in personal tax rates, which will particularly help low and middle income full-time employees, many of whom are women.

Income Support

The social wage also encompasses the issue of income support through the Social Security system. Through the Accord, the government has substantially increased social security payments and services, especially for women. Two thirds of aged pensioners are women and the vast majority of recipients of family payments are women. Since 1983 the government has increased pensions in real terms by 14 per cent and has greatly increased rental assistance for pensioners and low income families.


In addition to the Family Allowance, the government introduced the Family Allowance Supplement (FAS) in 1987 for low income families with children, designed to attack child poverty. This supplement has been equal to a wage increase of up to 30 per cent for some families. The Government also introduced the Child Support Scheme which helps the children of separated parents by making the non-custodial parent contribute financially for their children.

Education And Training

One of the key planks of the Accord agreements since 1983 has been the issue of education and training, since it is vital to Australia’s prosperity that our young people and our workforce become more highly skilled. Since 1983, the proportion of students finishing school and attending tertiary education has doubled. In addition, Australia is developing a national system of vocational education, which is linked to the award system.


Women have particularly benefited from these changes. Two thirds of girls now complete secondary school, and women now outnumber men in tertiary education. Government programs are in place to encourage girls to study maths and science at school and to study engineering at tertiary level. Training provided by employers is increasing due to the Training Guarantee Levy and to the national system of vocation training. In the tourism industry for example, employees in hotels are now given on the job training which is accredited by Tourism Training Australia and portable from one employer to another as well as being recognised in the award through a career path in the industry.


Housing is another area of the social wage which benefits women. Women are amongst the largest group who cannot afford to buy their own home, particularly aged pensioners and single parents. To assist them, the government has increased rent assistance and increased dramatically the public housing program. In the latest Accord, the ACTU and the government have agreed to allow employees to use up to $10,000 from their superannuation fund as a deposit on the purchase of their home. While this may appear to disadvantage employees in terms of their longer term superannuation needs, it allows young people to find capital at a time when they need it for housing, and recognises the reality that owning your own home is a key factor in providing security in retirement.


The issues outlined above are not an exhaustive list of social wage benefits to women. There are others, such as improvements in occupational health and safety and redundancy arrangements, which also benefit women workers. On top of all these issues is an over-arching commitment to raising the status of women and eliminating discrimination, in which considerable gains have also been made under the Accord. Under this heading come improvements such as the federal Sex Discrimination Act, the National Agenda for Women, the National Strategy on Violence Against Women and increased spending on women’s refuges.


There has also been increasing commitment by the Accord partners to the general issue of assisting workers with family responsibilities. In this area, the gains include the ACTU’s successful Parental Leave Test Case which extended one year of unpaid leave to fathers as well as mothers, the commitment to child care, a big increase in permanent part time work and increased flexibility in working hours, an increasing provision of leave for workers with sick children, and the government’s education program to encourage men to share in responsibilities in the home. We still have a long way to go before all these entitlements are universal, but they now have legitimacy and are gaining ground throughout the workplace.


It is clear from this brief overview that the social wage has brought very real benefits to Australians, especially women, and that these gains must be remembered when we look at the balance sheet in terms of the current recession and high unemployment.


In the recent election, the Liberals throughout they could attack all elements of the Accord without any complaints from the public of Australia. They thought they could introduce a tax on goods and services, new charges for health care, reduce wages through an attack on the award system, and laugh at the need for special policies for women – and still be elected. Women voters were quick to reject this approach, probably because women are at the front line in managing the family budget. Just before the election campaign, when these issues had been highlighted, the women’s vote swung back to Labor, in a way that was one of the crucial elements of the election. In future, it will be a foolish political party that ignores the needs of women voters or puts at risk the gains made under the social wage.


Iola Mathews, Industrial Officer, ACTU. Speech to the Australian Fabian Society, Melbourne, 2 May 1993.