Addressing Arguments Supporting The Prices And Incomes Accord

An addendum to 'Australia's Most Important Agreement, Explained.'

The Prices and Incomes Accord is the most consequential agreement to current Australian society, as argued in this recent video Australia’s Most Important Agreement, Explained.

The video was largely critical, but it’s not the only perspective present in discourse. As such, this article will seek to address some of the arguments more supportive of the Accord, typically espoused by a wide range of figures, from influencers to academics.

This article isn’t static, it will be updated as time goes on!

Hawke and Keating Weren’t Neoliberals

This retort is probably the most commonly made to any kind of analysis which situates the Accord (and therefore Hawke and Keating) as neoliberal. It’s one made by high-profile figures in the labour movement, such as Wayne Swan, who said, “The Hawke-Keating agenda was Laborism, not neoliberalism, and is still a guiding light.”¹

The essential argument forwarded is that, if Hawke and Keating were simply “merchants of neoliberalism,” then they wouldn’t of implemented the many policies concerning economic inequality and social disparities, namely reintroducing universal healthcare, introducing a tax on capital gains, increasing funding for health and education - in other words, the social wage.
To further distill the point, the Hawke-Keating governments weren’t neoliberal, because they performed large and sustained interventions into the market. To quote lifelong unionist Daren McDonald, “the philosophy of the Accord was a repudiation of reliance on restrictive fiscal and monetary policy; in its place was an embrace of government intervention, planning, and partnership.”²

This argument is based on a poor understanding of what ‘neoliberalism’ is. Neoliberalism isn’t simply just a maximalist set of laissez faire economic policies. First and foremost, neoliberalism was a reaction to the failure for post-war paradigm to maintain the capitalist mode of production. The combination of a falling rate of profit and a global energy crisis consequential of imperialism, had ended the long-boom, resulting in the crisis of ‘stagflation.’ Productive Fordist economies were unable to address this, and as such, capital moves away from productive investments towards investments in financial markets.³ This required financialisation, privatisation, and trade liberalisation.

This is commonly understood as deregulatory, as the state withdrawing itself from the state. However, it is more accurate to understand neoliberalism as ‘re-regulatory', rather than deregulatory. The state asserts itself in a different manner, but still nonetheless as authoritatively, in a time of paradigmatic change. This is true for even the most ardent neoliberals - Ronald Reagan for example tripled the budget deficit and national debt.⁴

But while neoliberal governments necessarily intervene into the market, the spirit of the social wage, like Medicare, was not necessary neoliberal in nature. Concerns around equity were vestiges of the post-war era, inserted in order to envelop key Communist Party (CPA) unions, as outlined in the video.
The social wage in practice however, was the tool by which the state integrated the union movement into consenting to neoliberalisation. The effect of this integration was the demobilisation of the union movement, which was historically a necessary presupposition to neoliberalisation. This is because the union movement was the primary obstacle to financialisation, privatisation and trade liberalisation, particularly in Australia.
The presence of the social wage doesn’t denigrates the paradigmatic change which occurred under the Accord. Risk was shifted from the state onto the individual, the unions were demobilised, and neoclassical (later fusing with Keynesianism into the new neoclassical synthesis) economics became hegemonic.

The integration of unions via the Accord has actually made Australian neoliberalism much more stable when compared to other economies. Proponents of the Accord point to this stability, and subsequent positive metrics, as evidence of its success. Indeed, the reforms of the Hawke-Keating governments embedded finance capital at the heart of the Australian economy, represented by two distinct wings - banking and superannuation. But, as theorised by Hyman Minsky in the 1970s, we cannot escape financial fragility. In the case of Australia, that looks like banking, superannuation and real estate converging, underpinning Australia’s high household indebtedness and growing housing unaffordability. The state (unofficially) must insure this arrangement via continual and significant fiscal and monetary stimulus, lest we experience an economic collapse. With every downturn successfully staved off however, the looming collapse only becomes bigger and more catastrophic.⁵

The Accord Didn’t Cause De-Unionisation

This is a particularly difficult argument to make, as clearly, de-unionisation has happened, and the policies implemented by the Hawke-Keating governments are causative of such. As discussed in the video, high household indebtedness caused by financialisation demonstrably reduces union density. What’s often argued instead is that globalisation decreased union density, thereby shifting the moral responsibility from the Labor Party, to being a historical inevitability that couldn’t be avoided.

Globalisation absolutely lead to de-unionisation. But that doesn’t mean that domestic conditions are completely null. As put by Australian Council of Trade Unions (ACTU) researcher Liam Byrne, the fall in union membership in Australia was amongst the most “extreme.”⁶ As outlined in the video, the activity of unions were changed, financialisation caused a dramatic rise in household indebtedness and privatisation in Australia has been found to cause de-unionisation.⁷
Moreover, what wasn’t covered in the video was the change from centralised arbitration to decentralised enterprise bargaining, or how unions and employers negotiated. Essentially, enterprise bargaining fragmented the union movement, thereby undermining the core power of unions - the ability to collectively withdraw labour.⁸

These above discussed factors were all endogenous to Australian capitalism, and vary greatly when looking over other countries. Therefore, the argument that de-unionisation was historically contingent on global trends that Australia had no sway over is a lazy way to gloss over the changing domestic conditions and their relationship with union density.

The Accord Only Concerned Industrial Relations, Not The Broader Economy

This is not so much an argument I’ve seen explicitly made, but one that I can anticipate. In the video, I highlighted how the unions weren’t present, even in an emblematic sense, in decisions pertaining to financialisation, privatisation and trade liberalisation.

However, as argued in her PhD thesis-turned book, Elizabeth Humphrys asserts continually that neoliberalisation could only occur with the consent of the trade union movement, in the form of a social contract (i.e. the Accord). This was because the unions were highly influential in Australian society, and particularly the economy.⁹ Unions broadly opposed these key tenets of neoliberalism. They even won some of it in writing on the original Accord, such as a commitment to protect local industry.¹⁰ The potential for the unions to cause industrial havoc and further force down the rate of profit, drove the reaction to control labour in order to unleash capital. Therefore, integrating the union movement into the state, via a social contract with a political party, was necessary to ushering in a new economic paradigm.

1. Wayne Swan, “The Hawke-Keating Agenda Was Laborism, Not Neoliberalism, and Is Still a Guiding Light | Wayne Swan,” The Guardian, May 13, 2017, sec. Opinion, https://www.theguardian.com/commentisfree/2017/may/14/the-hawke-keating-agenda-was-laborism-not-neoliberalism-and-is-still-a-guiding-light.

2. Daren McDonald, “The Accord: Visionary Strategy or Political Gimmick?,” SEARCH FOUNDATION, 2023, https://www.search.org.au/accord_40th_anniversary_of_hawke_government.

3. Farzad Javidanrad et al., “Theorizing the Process of Financialization through the Paradox of Profit: The Credit-Debt Reproduction Mechanism,” Journal of Post Keynesian Economics, April 16, 2024, 1–23, https://doi.org/10.1080/01603477.2024.2327998.

4. While the Reagan deficits were in part due to tax cuts, they were also driven by increases in government spending, namely in defence and ‘pork barrelling,’ as argued in: Lou Cannon, “Ronald Reagan: Domestic Affairs | Miller Center,” Miller Center (University of Virginia, October 4, 2016), https://millercenter.org/president/reagan/domestic-affairs.

Also outlined in: Daniel Yergin and Joseph Stanislaw, “Commanding Heights : Reaganomics | on PBS,” www.pbs.org, 1998, https://www.pbs.org/wgbh/commandingheights/shared/minitext/ess_reaganomics.html.

5. Martin Duck’s PhD Thesis is an excellent piece of political economy analysing Australian capitalism and our housing market: Martin Duck, “The Financialisation of Residential Capitalism in Australia,” Usyd.edu.au (PhD, 2025), https://hdl.handle.net/2123/33639.

6. Liam Byrne, No Power Greater (Simon and Schuster, 2025), 210-211.

7. Bobbie Oliver, “The Impact of Privatisation on Union Membership and Density: A Western Australian Case Study,” The Economic and Labour Relations Review 25, no. 1 (January 21, 2014): 28–46, https://doi.org/10.1177/1035304613518475.

8. DAVID PEETZ, “THE IMPACTS and NON-IMPACTS on UNIONS of ENTERPRISE BARGAINING,” Labour & Industry: A Journal of the Social and Economic Relations of Work 22, no. 3 (May 2012): 237–54, https://doi.org/10.1080/10301763.2012.10669438.

9. Elizabeth Humphrys, How Labour Built Neoliberalism : Australia’s Accord, the Labour Movement and the Neoliberal Project (Leiden ; Boston: Brill, 2019), 12

10. Ibid., 142.