The Essential Report Archive Read the latest report

  • Jul, 2012

    , ,

    Make Lovers of the “Free Market” Pay

    Here’s one thing you can place a bet on and never lose: every fire-breathing “free market” ideologue will wave his arms wildly demanding that we all bow down and worship the “free market”, except when those same ideologues have to actually pay for costs in the “free market”. Then, they become true hard-core lovers of…the public domain. Which brings us today to employee entitlements and, specifically, to the General Employee Entitlements and Redundancy Scheme.

    Dave Oliver, the head of the Australian Council of Trade Unions is on the right track here:

    THE country’s most senior union leader says the government should be able to go after the personal assets of company directors who do not keep aside enough money to pay employee entitlements when their businesses go bust.

    Australian Council of Trade Unions secretary Dave Oliver made the call yesterday following an Age report revealing that there had been a fourfold increase in the cost of the federal government safety net that pays entitlements to workers when companies fail.

    And when the money falls short for legally entitled payments, it ends up coming out of the federal budget, because, after all, when you, the business owner, owe money to workers, then, all of a sudden, the “free market” isn’t so lovely, huh:

    The $1 billion figure represents the estimated payout over the 11-year history of the taxpayer-funded General Employee Entitlements and Redundancy Scheme.

    You see, one of the things that makes it almost an absolute guarantee— you heard it here first and all bets are welcome — that we will go through another global financial crisis is that almost every banker who caused the crisis got away intact. They didn’t go to jail and they kept their mansions, yachts, private planes and even their girl friends on the side (after all, you keep your wealth and that girl friend stays, which is a great motivator to steal).

    Oliver is absolutely right — if you don’t go after these thieves’ personal wealth, nothing will change because ultimately the shareholders, or, in this case, the taxpayers are left with the bill:

    An Age analysis of insolvency data compiled by the Australian Securities and Investments Commission shows that the number of companies that fall over while owing their workers redundancy payments has climbed from 624 in 2008-09 to 827 in 2010-11, the most recent year for which figures are available.

    Over the same period, the number that owed more than $500,000 in unpaid redundancies when they collapsed more than doubled, from 24 to 55.

    As for Oliver’s suggestion that an emergency fund be set up paid for by employers, the mouthpiece for the employers replied, Stephen Smith:
    ‘It would impose a massive cost on companies”
    Really? How many times have we heard that malarky. What are your numbers, Smithie boy?