Brendan O'Connor (Gorton, Australian Labor Party, Shadow Minister for Employment and Workplace Relations) Share this | Hansard source

I might start my comments by responding to the . My mother's maiden name is McCormack, so it is possible we could be related. We might have a genetic grey-hair situation. That might be part of the reason that we are both grey-haired! I just listened carefully to what he was saying in relation to his concern for his constituency. I am sure he is sincere in many respects, but I think it is clear that, as a result of the government's position in relation to penalty rates, it is regional communities that are going to feel it most acutely. According to the McKell Institute, regional economies will be more affected by the cuts—by taking real income out of those economies. It therefore did not surprise me that the minister did not really go on about penalty rates in defending the government's position. Given that he is the small business minister, you would have thought that he would have attempted to put up a defence in relation to their position.

What has happened in the last week is that we have now had every crossbencher in the Senate abandon the government and the government's position in relation to penalty rates. We now have Senator Hinch, Senator Hanson and Senator Xenophon—who have long held the view that penalty rates should be cut—on the record saying they will support Labor's bill in the Senate. That is a remarkable turnaround. I suspect their motives are more about defending their own futures than those of workers who are being paid small amounts of money, and who will be paid less if the decision takes effect. But it also highlights how out of touch this government is, that they still stand there arguing the case that it is okay for the Fair Work decision to take effect. The Prime Minister has set the precedent, insofar as intervening in an order of an independent body to prevent truck drivers' wages going up. All he need do is support Labor. He can support a bill in the House that will negate the order that would be made by the commission for retail and hospitality workers' wages to go down. But he cannot hide behind the argument that it is an independent tribunal, because he has intervened on at least two occasions: in the truck drivers' matter, to which I just referred, and also in the CFA matter—which was also an interference by the parliament to realise the government's will, if you like. Hiding behind the notion that the decision is made by an independent body is a nonsense. It is a fiction. The Australian public considers that the only reason why the government supports the decision—given that it has intervened in earlier decisions—is that it wants to see a cut in real wages of those workers. Up to 700,000 workers and their families will be worse off as a result of the parliament failing to act.

Tomorrow in the Senate, a bill that mirrors the bill introduced by Bill Shorten into the House will be debated and voted on. That bill is likely to succeed. That bill is likely to pass through the Senate, and it is then incumbent on the House of Representatives to consider the bill, and the government has to think hard about whether it wants to maintain its very anti-worker position. This is quite extraordinary: Senator Xenophon, who has not only supported cuts to penalty rates but actually introduced a private member's bill to cut penalty rates, and Senator Hanson, who has been on the record supporting cuts to penalty rates for years, and Senator Hinch—the same—have now all wilted as a result of the campaign by Labor—and by workers, unions and others, community groups, and advocates for decency in this country—and will support our legislation. I welcome their vote, though I suspect their motives. I do not really care about their motives at this point, insofar as the vote is concerned, but I think it matters over the longer term. Can you really trust these people to do the right thing, if they are only doing it at the moment to save their hides?

The government is now running out of opportunities to do the right thing here. We will continue to argue that they should do that, because 1 July is not that far away. From 1 July, some part of that penalty rate cut will take effect. We know that money will be lost in real terms at a time when wage growth is at its lowest in a generation, and people who are currently struggling to make ends meet will find it even harder. And yet the government stands by and lets it happen. But they have an opportunity; we have provided them with that opportunity—that lifeline. They just need to take it.

The cuts to penalty rates and to the income of hundreds of thousands of workers may be made worse, given that there are now three other awards that are potentially subject to a cut in penalty rates. You might recall that the Prime Minister said that it was absurd and a nonsense for Labor—in fact he referred to me specifically—to suggest that there could be further cuts to penalty rates. He attacked me on radio for saying so, and yet there are now three other awards that are now before the commission. And it is as likely as not—probably more likely than not—that their conditions will be changed for the worse as well, because the arguments made in the other matters are comparable to the arguments that will be put by advocates to support the cut.

So there is going to be an immediate cut on 1 July for hundreds of thousands of workers. There are now more awards that are subject to arbitration by the commission to consider cutting their penalty rates, and the government cannot guarantee that there will not be further workers affected beyond that point. They cannot guarantee that and they are living a lie if they think they can say that they know it will not happen. In fact it is happening to more workers, and it may happen even beyond those workers under those three awards, namely beauticians, hairdressers, and restaurant, hotel and club staff, who are already low paid. They struggle and this will make things worse. You add to that the decision by the government to cut the Family Tax Benefit Part A and Part B and you see a further 1½ million Australian families worse off—$1.4 billion will be ripped from the pockets of Australian families by this government. Around 600,000 of these families receive the maximum rate of the Family Tax Benefit Part A, which means their household incomes are less than $52,000 per year.

To give you an example of what this cut will mean to families: a family on $60,000 per annum with two primary-school-aged children will be around $440 worse off in 2018-19; a single-parent family on $50,000 with two high-school children will be around $540 worse off; and a single-income couple or a single-parent family with three children under 12 will be around $605 worse off. Government members may not think that is a lot of money, as they have said in part-explanation of why they are supporting the cuts to penalty rates. But when you are living on the margins, week by week, not being able to pay bills—particularly those big bills that come in, like utility bills—pay the mortgage, pay the rent or pay those certain fees that come in from time to time, if one of your family members gets ill and has to pay beyond what can be covered by Medicare, it becomes a real problem. And I am afraid that this approach to cutting low-paid workers and middle-income earners, and also attacking low-paid workers, is really a pathway to what is happening in the United States.

Whilst I have some great admiration for many of the things that have happened in that country, and they have been a remarkable country in many respects, they have very significant inequality and it has got worse and worse over the last three or four decades, to the point where you really have people now working full time below the poverty line, where middle-class incomes have gone backwards in real terms and, in some instances, in nominal terms. The average wage in America has not changed in nominal terms since the Clinton administration. That means that there has been a very mighty fall in real income for those workers. They have hollowed out their middle class. They have impoverished their working class. They are about to rip away the efforts made by the former administration to have some form of universal health care for those people that need it most. That is not the country I want to live in, and yet I think that is the design of many on the other side who want to see lower wages, less support and less investment in education. They want to walk away from needs-based education, having promised it before the 2013 election, and erode access to health care in this country in some respects. The combination of those things would mean that we were heading down that American path, and that would be an absolute shame. It would change this country fundamentally and it would contradict the fair go and the fact that we consider ourselves to be somewhat egalitarian. And that would be a terrible thing.

That is why the government has to reconsider some of its policy positions. It needs to firstly look at the effects that some budgetary matters will have upon people struggling. It should immediately join Labor in supporting the bill introduced by the Leader of the Opposition to stop the effects of the penalty rates decision. It should also, in doing so, say that we should not allow any further awards to have their rates of pay or conditions reduced by cutting their penalty rates without compensation.

These are opportunities for the government to take. We can score political points against them on these matters, but that is not the important thing here; the important thing here is: we know the parliament can fix it; we know it is within the remit of the parliament and within the remit of the Prime Minister, and he should set about doing that.

One of my beliefs as to why he has not done that to date is: he does not really understand how hard it is for people who struggle economically. I am not suggesting for a moment that he has not had his own personal difficulties. All of us have, at one time or another. And he has made a lot of money, and good luck to him. But I do say this: he also made money from money. He was reasonably well off in his 20s, having inherited a lot of money. And he has never had trouble paying a bill; let us put it that way. That might be a problem—that he cannot understand what it means for these people because he has never confronted it—but you would expect, then, a level of empathy or understanding, if you are going to be the leader of the nation.

If he cannot draw on his own personal experience because he does not have any in this area then you would expect him to sit down with the people affected. He made a big song and dance about sitting down with some of the truck drivers and talking about that order of the commission. He sat and talked to volunteers in the CFA because he was concerned about their issues. How can it be that a Prime Minister can make hay in those areas and yet, when it comes to the lowest paid in the country—retail workers, hospitality workers, and, possibly, the way it is looking, hairdressers and beauticians, and restaurant staff relying on tips—not ask them what it means for them to suffer a cut in real income? It is a real indictment on him and on this government that they do not have any understanding. And it appears they now have no friends, either, when it comes to this position, because they are left standing alone in the House and in the Senate. The quicker they come to the realisation that they must take action and join Labor to support this legislation, the better—the better for them but, far more importantly, the better for those workers who are looking towards 1 July and trying to work out how they are going to pay for the bills once their wages have been cut.

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