All the research about unfair dismissal protections suggests that removing them does indeed make employers more willing to take people on (when times are good) but it also makes them quicker to let people go (when times turn bad).
The only debate is about whether or not the good employment effects of removing unfair dismissals protections outweigh the bad.
We won’t know until there is downturn.
The Prime Minister’s answer betrayed an unwillingness to even consider one...
“With careful economic management by experienced people there is no reason why we should contemplate a downturn. If the right people with the right experience continue in charge of our economic affairs, this country has every reason to believe and expect a continuation of the strong economic conditions we now enjoy, and that is our aim.”
It sounds as if John Howard is conjuring up another undeliverable election promise.
In 2004 he stood in front of a podium that read “Keeping Interest Rates Low”.
In 2007 he his likely to promise endless economic sunshine.
It is a promise that is beyond his capacity to make (although given the current and projected strength of Australia’s mining boom he is likely to have headed into well-earned retirement before that becomes apparent).
The man who more than John Howard or any of his ministers is responsible for Australia’s record 16-year run of economic sunshine is the recently retired Governor of the Reserve Bank Ian Macfarlane. In his valedictory Boyer lectures late year he made it clear he did not believe in the death of the business cycle. Indeed he foresaw a downturn brought about by increased borrowing, financial engineering and a growing willingness to take risk, the sort of phenomena embodied in the new wave of private equity takeovers.
The Australian economy will turn down again, and when it does the ease that WorkChoices gives bosses to sack workers is likely to make that downturn worse, just as it is probably making the upturn better right now.
