Tricky trade-offs will show what Labor values most when we can’t have it all

Two weeks ago, Australian technology juggernaut Canva announced it would sack, restructure or relocate more than 1200 of its employees. Afterwards, there was a rush of Canva employees seeking out their union. According to The Australian Financial Review, meetings suddenly grew five times more popular.

Tech, with all its talk of individual genius and creative destruction, doesn’t seem like an obvious growth area for unions – and yet that is exactly what we might see. While Canva did not attribute those job losses to AI, other companies announcing mass sackings, such as Atlassian, have. It is also true that tech may be the canary in the coalmine, with redundancies in other industries to follow. Which means, in turn, that we may be about to witness the single biggest contributor to union membership in decades.

If that occurs, its significance will go well beyond the usual political questions of industrial relations regulation. Unions have played a major role in shaping Australia’s sense of itself – for example, the fact we are governed by a party literally named Labor. But the influence extends further still.

Consider the Coalition government’s actions during the pandemic, which indisputably saved thousands of jobs.

Two years ago, the Productivity Commission made the point that one of the reasons productivity did not recover very well here afterwards was the fact those jobs had been saved. In America, jobs had been lost, businesses had died – meaning workers went to more productive parts of the economy. Here, relatively unproductive businesses survived. And the fact unemployment stayed low under the Albanese government also contributed to poor productivity, because more young, inexperienced workers are working.

This is only part of the productivity story. But it points to the far more potent questions hiding just behind an often sterile topic: what is the fundamental character of this country? During the pandemic and after, both Coalition and Labor answered: Australia is a nation in which we look after each other and prioritise jobs and social stability over market forces – and, yes, to some extent over productivity.

That trade-off is pertinent right now. We are living through a period in which cries for increased productivity dominate public debate. At the same time, unemployment is rising, as are living costs. And many of the “solutions” put forward to the productivity malaise, like making it easier for businesses to sack workers or keep their wages low, cut directly against those concerns. At a time when we can’t have it all, what do we prioritise and how? What are the qualities of this country that we prize most?

These are questions for us all – though ones we rely on governments to answer for us.

Public debate is awash with such choices right now, in which two incompatible goals seem to sit side by side. Climate Change Minister Chris Bowen is in Turkey this week, urging other countries to do more to tackle climate change; last week he was joined by Anthony Albanese. Meanwhile, Australia remains one of the world’s largest exporters of fossil fuels – a fact Labor largely skates past.

There are other, more specific conflicts in government actions. In his role leading climate change negotiations, Bowen is arguing for electrification. Back in Australia, where Labor needs to cut spending, there is speculation subsidies for home batteries and electric vehicles may be trimmed.

There is some justification for this: across a range of areas, this government has spurned means-testing, rather than targeting benefits to those who most need them. But is climate the area in which to start cracking down? And consider the fact many of the middle-class people accessing such benefits are being hit hard by rising mortgage payments. Is this the time to target them?

It is on the economy that such difficulties are clearest. Earlier this year, Labor moved towards cutting migration – just when the economy seems finally to be slowing, making our need for migration to drive economic growth stronger than ever. With a budget update looming, demands to cut spending are everywhere – but as I wrote six weeks back, such cuts may arrive just when interest rate rises are already slowing the economy. No doubt voters would like some of the cost-of-living relief they received last term, but every dollar the government releases into the economy risks more inflation.

The contradictions are apparent in policies the government is already pursuing. Its actions on housing taxes were overdue. But they have come at a time when house prices are falling anyway and the economics of construction are already under pressure, meaning housing supply may not grow as quickly as hoped.

Data centres, a source of economic growth, are adding further to those pressures because they take builders away from building homes – and they are keeping inflation high as well.

What about new ideas? The government wants universal childcare – but how will that interact with house prices, as more parents head back to work earlier? Considering the increasing role of unions, it is interesting to consider what place their recent proposals – like shorter working weeks – might assume over time, and how businesses, demanding policies that drive growth, might react.

These are genuinely difficult issues to resolve. Albanese’s Labor has become particularly skilled at finding goat tracks through seemingly impossible terrain. In some ways, it has been necessary. But there is a potential cost to this approach. As a government picks its path warily, avoiding this problem or that, retreating often, it risks confusion, both in its own ranks and with the public. Does it know where it is heading, or is it merely taking one step at a time, caring only about not falling over the edge?

Voters will forgive governments a lot if they believe they are being led. That means leaders must be both willing and able to articulate their aims to the country. Voters may not agree with the direction of travel, but they would still prefer a government has one. For those governing us, as the country changes and contradictions come to the fore, being clear about their destination – both in themselves and with voters – is more difficult than ever. And more necessary.

Sean Kelly is a regular columnist. He was an adviser to former prime ministers Julia Gillard and Kevin Rudd.

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