Wayne Swan (Lilley, Australian Labor Party) Share this | Hansard source

I want to say a few words on penalty rates, because I think this issue is emblematic of wider issues where there is a stark difference between those on this side of the House and those on the other side of the House. On this side of the House, we believe that it is not only good for the individual but good for the economy if we pay people fairly. We also believe that if people work unsociable hours then they should be paid a penalty. But what we have seen in this parliament over a long period of time—and it never changes—is that the Liberals want to get rid of penalty rates. There are many of them who are game to say that very openly. The member for Petrie is not because he knows that that position is rejected by his electorate, as indeed it is rejected by people in my electorate. What has happened in our country is that we have avoided going down the American road, where the middle class has been hollowed out and an army of working poor has been created, because we have had a strong industrial relations system which has paid people fairly and recognised that unsociable hours should be the subject of penalty rates.

The member spoke before about various deals that have been put in place by various unions. I am proud of the fact that there are unions that have rolled penalty rates into higher base rates of pay. The member of Petrie is so stupid that he does not understand that if you are cutting penalty rates—which is the objective of many in the government—you are effectively cutting that permanent rate as well. So an attack on penalty rates is an attack on higher permanent rates of pay rolled into particular packages for particular groups in the workforce. So he is not only advocating a cut to penalty rates at a point in time for people who are irregular workers; what he and they are actually advocating is a cut to permanent rates of pay which have been built into agreements for large classes of workers, particularly in retail but also in health.

In my area this has happened in a number of industries, and people are receiving higher rates of pay through penalty rates rolled into their permanent pay, which gives them a higher standard of living. But the trickle-down brigade on the other side of the House have one solution for all of their economic gains. Their one solution for jobs and growth is to cut pay and to cut tax for the rich. This is what trickle-down economics is all about. It says, 'If you give people lower pay, if you deregulate the system and you give tax cuts to the rich, then suddenly all the economic activity from that will trickle down, and people will automatically be paid higher wages.' It is crap, it does not work and it is now rejected by the great bastion of trickle-down economics, the International Monetary Fund, which now argues a very nuanced argument that simply says, 'A strong middle class and good wages and working conditions are themselves a cause of growth, not just a consequence of growth.'

What we are witnessing here is the age-old debate. The Liberals are in here with all of their old Work Choices preferences hidden in new language about how they suddenly stand for penalty rates. They do not, their party room does not and, when they get the chance, what we will be seeing from them is Work Choices yet again. That is what the penalty rates issue is all about. They went to the wall for it in 2007 and they keep going to the wall for it, because what they are really about in our economy is wealth concentration. They are not actually about wealth creation; they are about wealth concentration. In their world, if you reduce the labour share of the economy and increase the profit share of the economy, the economy magically grows. That of course is the theory behind the absurd proposition that they took to the last election of a $50 billion corporate tax cut, just about all of which was going to go to multinational companies and $7 billion of which was going to go to our four biggest banks. Somehow that was the panacea to produce jobs and growth—a classic trickle-down prescription of the kind rejected by the IMF which has led to gross inequality around the world, most particularly in the United States. But the modern Liberals do not get it. They take this proposition, as discredited as it is and was even by the Treasury modelling, and stand up and say: 'We've got this magic elixir for growth. We'll just give the very rich a tax cut, and you'll get jobs and growth.' It is rubbish, it does not work and the leading edge of that argument is to cut wages by attacking penalty rates.

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