Modern History · Year 12 · Australia's Transformation Since 1945 · Term 4

The Prices and Incomes Accord

Study the Prices and Incomes Accord and its impact on industrial relations and economic stability.

• ACARA Content Descriptions
• AC9HI12K51
• AC9HI12K52

About This Topic

The Prices and Incomes Accord, launched in 1983 under Prime Minister Bob Hawke and Treasurer Paul Keating, marked a cooperative pact between the Australian government, the ACTU, and employer groups. It exchanged moderated wage claims for tax cuts, Medicare, and superannuation to tackle stagflation, with inflation over 10% and frequent strikes. Year 12 students analyze this per AC9HI12K51 and AC9HI12K52, exploring how it stabilized the economy and reshaped industrial relations in Australia's post-1945 transformation.

Students evaluate its effectiveness through data on inflation dropping to 4.7% by 1985, unemployment trends, and fewer disputes, while critiquing real wage erosion and centralized control. Key questions guide comparisons to 1970s wage explosions and 1990s enterprise bargaining, building skills in causation, continuity, and change. Primary sources like Accord documents and speeches reveal stakeholder perspectives.

Active learning benefits this topic greatly. Role-plays of negotiations and debates on outcomes make abstract policies concrete. Students gain empathy for unions, employers, and government, while collaborative source analysis hones evidence-based evaluation, aligning with historical inquiry demands.

Key Questions

1. Analyze how the Prices and Incomes Accord aimed to manage inflation and industrial disputes.
2. Evaluate the effectiveness of the Accord in achieving its economic and social goals.
3. Compare the Accord's approach to industrial relations with previous and subsequent models.

Learning Objectives

• Analyze the stated goals of the Prices and Incomes Accord regarding inflation control and industrial dispute reduction.
• Evaluate the Accord's success in achieving its stated economic objectives, using quantitative data on inflation and unemployment.
• Compare the centralized bargaining approach of the Accord with the decentralized enterprise bargaining model of the 1990s.
• Critique the impact of the Accord on real wages and the distribution of economic gains among different social groups.
• Explain the mechanisms by which the Accord sought to achieve wage moderation in exchange for non-wage benefits.

Before You Start

Post-War Australian Economic Conditions (1945-1980)

Why: Students need to understand the economic context of high inflation and industrial unrest that preceded the Accord.

The Role of Trade Unions in Australia

Why: Understanding the historical power and objectives of unions is crucial for analyzing their participation in the Accord.

Key Features of the Australian Economy

Why: A basic understanding of inflation, unemployment, and wage setting is necessary to grasp the Accord's mechanisms.

Key Vocabulary

Prices and Incomes Accord	A formal agreement established in 1983 between the Australian government, the Australian Council of Trade Unions (ACTU), and employer organizations to manage wages, prices, and economic policy.
Stagflation	A period of high inflation combined with stagnant economic growth and high unemployment, a condition the Accord aimed to address.
Real Wages	The purchasing power of wages, adjusted for inflation. The Accord's impact on real wages is a key area of analysis.
Centralised Bargaining	A system of industrial relations where wages and conditions are negotiated at a national or industry level, as was characteristic of the Accord.
Enterprise Bargaining	A system where wages and conditions are negotiated at the individual workplace or company level, which largely replaced the Accord's model.

Watch Out for These Misconceptions

Common Misconception

The Accord was forced on unions by the government.

What to Teach Instead

It emerged from voluntary negotiations led by ACTU's Bill Kelty and Hawke's consensus style. Role-play activities let students experience bargaining dynamics, revealing mutual compromises and building understanding of cooperative federalism.

Common Misconception

The Accord ended all inflation and strikes permanently.

What to Teach Instead

Inflation fell sharply but later rose; disputes dropped 70% initially yet persisted. Data graphing in groups helps students track trends over time, countering oversimplification with nuanced evidence.

Common Misconception

The Accord only helped employers by cutting wages.

What to Teach Instead

Unions secured 'social wage' gains like universal health care. Balanced source debates expose all perspectives, helping students weigh trade-offs and avoid presentist bias.

Active Learning Ideas

Role-Play: Accord Negotiations

Assign students roles as ACTU leaders, employer reps, or government officials. Provide historical briefs for preparation, then hold 20-minute negotiations to draft a mock accord. Conclude with a whole-class debrief comparing to the real Accord.

50 min·Small Groups

Jigsaw: Accord Phases

Divide class into expert groups, each studying one Accord phase (I-IV) using provided sources. Experts then mix to teach home groups key changes and impacts. Groups summarize findings on shared charts.

45 min·Small Groups

Formal Debate: Accord's Legacy

Split class into affirm/negate teams on 'The Accord achieved its goals.' Teams prepare with data on inflation, wages, and disputes. Hold structured debate with rebuttals and class vote.

40 min·Whole Class

Source Carousel: Impacts

Set up stations with cartoons, speeches, and stats on economic/social effects. Small groups rotate, analyze one source per station, and note evidence for/against effectiveness. Regroup to share insights.

35 min·Small Groups

Real-World Connections

• Economists at the Reserve Bank of Australia continue to analyze historical economic agreements like the Accord to inform current monetary policy decisions aimed at managing inflation and employment.
• Union officials and employer representatives today still engage in negotiations over wages and working conditions, drawing lessons from the successes and failures of past centralized agreements like the Accord.
• The structure of Australia's current superannuation system, which includes mandatory employer contributions, has its roots in the non-wage benefits negotiated as part of the Accord.

Assessment Ideas

Discussion Prompt

Pose this question to the class: 'Imagine you are a union delegate in 1984. Would you vote to accept the terms of the Accord? Justify your decision by referencing at least two specific benefits and two potential drawbacks for your members.' Facilitate a debate based on student responses.

Quick Check

Provide students with a short data set showing inflation rates and strike frequency from 1980-1990. Ask them to write two sentences explaining the trend in industrial disputes and one sentence explaining how the Accord might have influenced this trend.

Exit Ticket

On an index card, ask students to define 'real wages' in their own words and then list one way the Prices and Incomes Accord aimed to increase or protect them.

Frequently Asked Questions

What was the Prices and Incomes Accord?

Signed in 1983, the Accord was a tripartite agreement between the Hawke government, ACTU, and employers to control inflation via wage restraint. In return, workers gained tax relief, Medicare, superannuation, and job preservation measures. It shifted Australia from conflict-based industrial relations to partnership, influencing policy for a decade across nine phases.

How effective was the Prices and Incomes Accord?

It succeeded in halving inflation to 4.7% by 1985, cutting disputes by over 70%, and aiding recovery from recession. Critics note real wage declines of 10% and over-centralization. Long-term, it enabled structural reforms, though enterprise bargaining later decentralized wages.

How did the Accord impact Australian industrial relations?

Pre-Accord, 'wage explosions' fueled inflation via pattern bargaining. The Accord centralized awards, reduced strikes, and introduced consent awards. It fostered peak-level talks, contrasting adversarial 1970s models and paving for 1990s individual contracts, per AC9HI12K52.

How can active learning help teach the Prices and Incomes Accord?

Role-plays simulate negotiations, letting students embody stakeholders and grasp compromises firsthand. Jigsaws on phases build expertise through teaching peers, while debates sharpen evaluation skills. These methods make economic history engaging, counter misconceptions via evidence handling, and connect abstract policies to real decisions, boosting retention and critical thinking.