Julian Hill (Bruce, Australian Labor Party) Share this | Hansard source

Well, another day, and it's no surprise, as the member for Melbourne observed in his closing there, that we see yet another government bill—a trumped up Trump-style government bill—attacking unions, the Fair Work Laws Amendment (Proper Use of Worker Benefits) Bill 2017. This is extraordinary, in terms of both substance and process. The process does need to be looked at from the outset. There are five schedules—80 pages—amending five pieces of legislation, with significant implications for employer groups and for unions. This needs detailed technical examination. It doesn't deserve to be rushed through the parliament as if somehow this is a crisis, as if this is urgent. It would behove the government to allow us to do our jobs as legislators and spend time actually reflecting on the clauses and the words, particularly given that apparently it's implementing some of the recommendations from that outrageous Heydon royal commission—which was quite some time ago, so it's difficult to understand what the urgency is. But the government of course is trying to rush it through. There may well be worthy bits, but you wouldn't really know, and you can't be confident in the time available. And, as the member for Melbourne and others have observed, you certainly cannot place any reliance anymore on this minister's word, given her appalling behaviour and given that there is still a lack of explanation around the affair with the ABCC commissioner.

It is based, as we see from the press release—a bit like the energy policy: it's government by press release or letter, these days; you don't have to release policy or modelling—on familiar nonsense about unions. Unions are apparently big business, and they're focused on making profits and not representing workers, and therefore we should just vote for this, which is utter garbage. Just because you say it, government, that doesn't actually make it true. Worker entitlement funds are jointly established by unions and businesses, and they operate primarily to ensure that workers' entitlements are protected. But they also have important secondary functions, and there should be no shame about that; there's no problem with their providing important services, including safety advice and services. Regarding the Heydon royal commission, apparently we're supposed to vote for this because it came out of a dodgy royal commission. I mean, give me a break: it's the same old conservative trick that we've seen through the decades. It started I think with the Queensland conservative government having a witch-hunt royal commission on, as they say, 'Red Ted' Theodore, when he was the Commonwealth Treasurer back in 1929-30. We saw the same outrageous, garbage trick played by the Court government on Carmen Lawrence when she was a senior minister in the Keating government. We see exactly the same trick that conservatives always pull: they misuse the powers of a royal commission. In this case, it is to get the opposition leader in the dock, get him on tellie being investigated by a former High Court judge. It is completely outrageous. He attended a Liberal Party fundraiser and we give it no credence whatsoever.

You really have to look at the context. We have made some important points in the second reading amendment. This fundamentally is a desperate attempt. If you say 'fair work' in the title, perhaps the government thinks that someone might be fooled that this is in some way fairer, in some way going to improve workplaces—

Ms Madeleine King interjecting—

Indeed. Thank you, member for Brand. You are my muse here in this chamber. We have a packed gallery.

This is a desperate attempt to distract public attention from the fact that the government has no agenda to address wage stagnation or underemployment or rising inequality, and to distract people from remembering that the government is really only focused, as you see from their budget and legislative priorities, on the top end of town. We all get a tax cut. Everyone earning over $180,000 in this country gets a tax cut. Let's give it away! Fire up the nation's ATMs—$65½ billion company tax cut, including for Gina Rinehart and her mates in the next tranche! Defend to the death the unjust and highly regressive damaging and unsustainable tax breaks that go to high-income earners overwhelmingly. Not just stagnant wages though—and this is the piece de resistance—

An honourable member interjecting—

That's right. Pop that into Hansardis to actually cut wages. And, as the second amendment shows, the government could legislate now. They could put this bill aside, push it down the Notice Paper, let the parliament do its job, let us work through it clause by clause, let us reconcile it to your dodgy royal commission report and see whether it is one of the reasonable bits in there, and focus on stopping the wage cut for 700,000 low-income workers. That should be a priority for the parliament to legislate.

Indeed, there is a bill on the Notice Paperyou shouldhave had enough time to look at it because it has been hanging around for months—that the Opposition Leader introduced to do exactly that. Perhaps, if plebiscites and surveys are the order of the day, you can have a survey and see what the Australian people think about penalty rate cuts. Try that on for size.

An honourable member interjecting—

No. Call an election. Try that. With regard to the penalty rate cut for hospitality, fast food, retail and pharmacy awards, fundamentally this is a wage cut for 700,000 workers. You can dress it up however you want; it is a wage cut, a wage cut, a wage cut. It is the thin end of the wedge, as we are already seeing, for millions of others.

This is not a blank sheet. We are not designing society or the economy from scratch. We need to consider reality as we find it in the real world, outside this building, not on the IPA's magical happy place or on the whiteboard where they dream this rubbish up, but in the real world, in families and communities where young people and women will bear the brunt of these wage cuts, as the second reading amendment points to.

The first point I would make is this is not inevitable. We are told there is a sense of inevitability. 'Oh well, the Fair Work Commission said this. It's a neoliberal happy trickle-down world. It's inevitable.' It's not. We choose. We can, and we have the responsibility to actively choose the kind of society we want. This is an unwanted and unnecessary change to the long-established economic and social structure in Australia. It goes to the heart of the kind of society we want to be.

Labour is not—this is news to those opposite, the bean counters, the widgets, the Daleks—a normal economic input like electricity or rent, at least not outside the IPA's happy whiteboard place. Ethical and human concerns must be taken into account in workplace relations laws. The Australian community has long valued people working unsociable hours. They miss family events, they miss time with kids, they miss sports and they miss social events. Everyone else can have a day or a night out, but not those people working unsociable hours. And this stuff is important to the fabric of our communities, to the kind of place and country we want to be. It is often thankless work—shop workers, shelf packers, cleaners—people who make everyone else's Sundays relaxed should be valued.

Ms Madeleine King interjecting—

You're on my side, Member for Brand. Reducing penalty rates reduces the necessary respect and the value of time that should exist between employers and employees. Remember? Key point: it is not a normal economic input. These are human beings, with families and lives; they are part of society, not just rent or electricity. As a society we have every right to shape our economy to suit our way of life. We can choose to keep these arrangements, and the economic arguments that we somehow just have to ditch them are wrong.

The second point I would make is that penalty rates are a necessity for millions of Australian households. They rely on them to cover their expenses. They're not optional extras or executive bonuses. So what this wage cut for 700,000 people means—that the government is too gutless to actually stand up and stop—is that people will be forced to try and work more hours just to maintain their family's take-home pay, which of course is impossible for most people because of family or caring responsibilities or study.

Secondly, if they can't work more hours to keep their same take-home pay, guess what? They lose household income, which worsens inequality, because, unsurprisingly from this mob, these wage cuts overwhelmingly affect lower-income workers. That in turn reduces spending in the real economy, because the people affected by these wage cuts spend every dollar of their pay. They are not pouring thousands of dollars extra into superannuation; they are not spending it on enormous overseas holidays; they are not piling it up in the bank. They spend it on their daily lives.

In terms of the economic impact, cutting wages is not an efficient way of boosting productivity or growth. It actually does the opposite, because reducing domestic spending reduces turnover in exactly the kind of businesses that are cutting wages. It is an unvirtuous reinforcing cycle. An average $3,500 per year will be reduced from full-time employees wages. Thousands of people will be unable to spend thousands of dollars in local economies. Instead, these funds will be pocketed by businesses as profit for high-income earners, which means a less-positive impact on the economy, because these people, probably people in this room here, are more likely to save this money or spend it overseas, which doesn't add to our national prosperity.

With regard to employment, we're told that somehow you have to just roll over and suck it up, grin and bear it, because, somehow, it will create more jobs overall. This is based on a flawed version of the discredited trickle-down myth, which goes something like this: make doing business cheaper and it will increase aggregate profits and therefore employment will somehow increase, as business has more revenue with which to employ staff, and businesses will also remain open for longer hours as the cost of labour reduces. Yet the Fair Work Commission finds that the aggregate impact on employment rates of cutting penalty rates is negligible. So, all we have is a very weak case based on theory and anecdote, and it is not a proper basis on which to make policy or to justify such a massive change. The evidence, of course, is that larger businesses do not choose to remain open for longer and they don't invest labour savings into more jobs. Larger businesses, of course, employ as many people as they need to do the job—no more, no less. If they need more people they will employ them.

If a few businesses do open a bit longer, that doesn't mean that consumers will spend more. Most businesses in the affected industries are already open for long hours. There are plenty of opportunities for consumers to spend their money. Longer trading hours don't mean more money in the average consumer's pocket. People can't spend money they don't have—who knew! For any extra hours created here or there, as I said at the start, back to where we began, existing workers will be working those extra hours just to try to maintain their take-home pay. It doesn't create new jobs overall. It forces people to work longer for the money they already have.

If you think about timing—timing is everything, they say—even if you believe this nonsense theory this is the worst possible time in years, decades really, to cut wages, because wages have stagnated for the last five years. We are in the 20th quarter, I think probably the 21st consecutive quarter, since mid-2012 of falling wages growth for private sector workers. The most recent rate of growth was only around two per cent, the lowest since 1991. This consistent reduction in wage growth rate has resulted in real wages remaining stagnant for over 4.5 years, and in many cases actually declining in real terms.

We have the government over there introducing voluminous legislation to implement supposedly critically urgent recommendations from a dodgy royal commission that has hung around for ages—it is still unclear why it is so urgent—instead of focusing on something that actually matters to Australians. As I said, I dare you to have a plebiscite or a survey to see what people think of penalty rates cuts.

This is happening at the worst possible time. It shrinks the whole economy, because we create a negative cycle where wages remain depressed. Most sensible mainstream economists cite that average everyday Australians have identified lack of wage growth as one of the biggest problems facing the economy. It makes the cost of living even more difficult, it worsens inequality, it is bad for business, consumers spend less and, of course, it threatens budget projections.

The final point I want to touch on is something we've been whacked over the head about. When the Fair Work decision came out we said, 'This is going to set a pattern. This is going to flow on to other industries and other sectors.' We were told that that was wrong, it was not fair and we were making it up. Labor said it was the thin end of the wedge. We were told by the government: 'You're running a scare campaign. It's only these awards.' Well, now we're seeing the true agenda. This decision is spreading, right now: other awards, other sectors, other workers and other industries are pursuing these pay cuts. We've seen the application, already, from the restaurant and catering industry. There's talk of the hairdressing industry and many others.

The decision itself is flawed, and that's why we should be prioritising legislation to fix this decision, not mucking around with voluminous legislation, shoving it through the House when the case hasn't been made. Some findings in the Fair Work Commission decision about fact and law do go beyond these industries. It's not a Labor scare. This is a considered, detailed analysis that commentators have made, and we are now seeing it happen in the Fair Work Commission. The kind of factors which the Fair Work Commission said justified these wage cuts include: existence of entry-level jobs, consumer expectations of weekend public holiday service, the potential for increasing jobs, and the disutility for employees not, on balance, preventing a reduction in rates. The fact that employees were earning just enough to cover their weekly expenses wouldn't prevent a reduction in rates.

These exact same factors apply in numerous other industries. That's the text of the decision, and that's what we're seeing other sectors now jumping on board with, salivating for a wage cut, so they can pocket some profits. The industries most at risk are aged care and health care, nursing, transport, security, cleaning, construction, teachers, education workers working on weekends—such as sports coaches, mining workers, social, community, disability and homecare nurses. I'll probably be told by those opposite that that's a scare campaign. But it's not. Exactly the same conditions that underpin this flawed decision are flowing to other sectors right now. The decision is wrong. It was a flawed legal framework. There's a need to prevent it from being implemented and to fix the legislation.

The final thing I'll point out is that it will also affect people on enterprise agreements. Some commentary is saying that people on enterprise agreements are immune. That is, frankly, rubbish, because in the real world the relevant award becomes a measuring stick. This will flow through. It is flowing through elsewhere, over time, even within this sector. If the government had a shred of decency and had any contact with the real world, they would introduce legislation now to fix this flawed decision.

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