What is Accord
The Prices and Incomes Accord was an agreement between the Australian Council of Trade Unions and the Australian Labor Party government in1983. The Accord developed at a time when the only response to inflation appeared to be to slow down the economy. Employers were not party to the Accord. Unions agreed to restrict wage demands and the government pledged to minimize inflation. The government was also to act on the social wage. At its broadest this concept included increased spending on education as well as welfare. This was seen as a method to reduce inflation without reducing the living standards of Australians. At the beginning of the Accord, only one union, voted against the Accord. The Accord continued for the whole period of the Labor government through seven stages including, after 1993, enterprise bargaining.
The original accord was designed to tackle the problem of stagflation and to reduce the number of industrial disputes. It included half-yearly wage increases indexed to the consumer price index (CPI), and supported the introduction of Medicare. The Accord is a centralized system of wage fixation, for the purpose of economic recovery
End of the Accord
The election of John Howard in 1996 dramatically changed the ideological position of the Australian government. The Liberal government was opposed to any wage fixing. This government's core beliefs were that the free market should determine wages, whilst the government should focus on tight monetary policy and avoid budget deficit. This began a period of increased hostility between the government and the union movement in Australia and marked the end of the Accord period.
Criticisms of the Accord come from both the right and the left. Leftist critics claim that it kept real wages stagnant for over ten years. In this view, the Accord was a policy of class collaboration and corporatism. By contrast, right-wing critics claimed that the Accord reduced...
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