Incomes Policy and Industrial Relations: Britain, Sweden and Australia

Abstract

Increasingly, economic debate in Australia and other Western, developed economies is directed to the interdependence and potential conflict between the out come of labour market negotiations and government economic policy. Industrial relations becomes identified as a cause of economic problems and governments have been attracted to policies that seek to alter the outcome of labour market negotia tions, using what are often termed "incomes policies". However, because of the nature of industrial relations, incomes policies which might be established to express government demands also have an influence over the balance of powers and relations within the economy. This dynamic process presents problems for practitioners and academics assessing the full effect of incomes policies. The corporatist model developed by Leo Pantich is one useful model of the changes that can occur in trade union, employer and government relations under incomes policy conditions. Draw ing on the flexibility of such a process model, this article details the development of incomes policies in Britain and Sweden, examining the changing relationships and powers that have occurred when the parties (and especially the trade unions) have responded to the demands such policies make on industrial relations. The differences in trade union reactions to industrial relations adjustment provide lessons and experiences for any economy where the government seeks to direct labour market negotiations. In terms of the impact on trade unions particularly and industrial relations in general, the British and Swedish lessons offer valuable insights for Australia. Examining the dynamic incomes policy effects in Australia, we conclude that only if industrial relations practitioners and trade unionists are aware of the dynamic pressures of intervention and respond in a structured manner can they avoid the traps identified by British experience and benefit from the opportunities offered by Swedish initiatives.