Laura Smyth (La Trobe, Australian Labor Party) Share this | Link to this | Hansard source

I am very pleased to be able to speak in this quite timely debate on the importance of penalty rates in our society, particularly for low paid workers. It gives all members of the House an opportunity to acknowledge the importance of penalty rates for workers, particularly those who often work unsocial hours, on public holidays and on weekends and who rely on penalty rates in many ways to make ends meet. I am thinking particularly of women working part-time, women working shifts and women working on weekends or in the evening. I am also thinking particularly of young people who are studying or people who are trying to supplement their income so that they can go on to study in order to improve themselves and ultimately to succeed and get careers.

It is a timely discussion for debate in this place since Fair Work Australia is currently reviewing public holiday and penalty rate provisions in a number of modern awards as part of its two-year review of modern awards. It is also timely because the matter has been raised in a different context in the other place. And then it is timely because there are some within the opposition who are still looking back to Work Choices and all of the things that that brought to Australian workers. I note that former Prime Minister John Howard has entered the fray in recent times on this issue. While those opposite will, by and large, remain relatively quiet these days on the question of penalty rates, there are certainly those, including, for instance, the member for Moncrieff, who have looked back at some of the provisions of Work Choices most favourably in recent times.

While those opposite will, by and large, as I said, not comment on penalty rates, not comment on the importance of penalty rates for low paid workers and keep the details of what is to be their industrial relations platform fairly quiet for the time being, we certainly know that the Leader of the Opposition and the Deputy Leader of the Opposition and others within the opposition ranks have remarked on these things unfavourably in the past.

I look back as recently as February of 2010, when we had the Leader of the Opposition saying:

When you think of the long-term impact of Labor's new system and the re-emphasis on penalty rates, the weekend as we have known it will no longer exist.

That is another example of the fear mongering perpetuated by the Leader of the Opposition, this time directed towards penalty rates. At the same time, we had the Deputy Leader of the Opposition saying:

The fact is that there are workers now who are suffering under the new awards system. Because it is bringing back penalty rates on weekends …

While people from the opposition benches will no doubt go fairly quiet on the issues of modification of penalty rates—they will describe it as something like flexibility; there is a lot of discussion of flexibility—unfortunately we are all too aware of the views which are more secretly held by those opposite, of the views which were articulated not terribly long ago—only in the last couple of years—about penalty rates. We understand what their real motivations are around penalty rates. It is for those reasons that this debate is timely. It is for those reasons that it is important that members have the opportunity to put on record their support for penalty rates for low paid workers, in particular.

We know that around 65 per cent of agreements entered into under WorkChoices saw penalty rates cut. It was often the case that there was no compensation in return. At the same time, we saw things like reductions in the shift rates of workers, and a reduction in their take home pay. Yet we certainly have seen, in recent times, the former Prime Minister, John Howard, talking about WorkChoices and saying things to the effect that the election loss of the current opposition in 2007 was attributable to a range of things, not just WorkChoices. People are starting to have a bit of a review of WorkChoices, and there is at least one member of the Liberal Party who is remembering it fondly. It is important that through this resolution we recognise that many families and many individuals across our community rely on penalty rates as a key component of their income. That is particularly the case for some of our lowest paid workers. Penalty rates often compensate workers for time that they might otherwise spend with family or friends, and additional pay gives some acknowledgement that work-life balance is important to workers, their family life and their health and well-being.

I refer members to some of the submissions that were made in the Senate Standing Committee on Education, Employment and Workplace Relations inquiry into the Fair Work Amendment (Small Business—Penalty Rates Exemption) Bill 2012 recently. In particular, paragraph 22 of the submission made by the Australian Catholic Council for Employment Relations quite rightly says:

Penalty rates compensate for working in unsocial hours. Work on evenings, nights, weekends and public holidays is unsocial because of its impact on a wide range of individual and family arrangements. Rest, recreation and family time are valued and work in unsocial hours precludes workers from these opportunities. The loss of these opportunities is no less important for people who work in activities that are by their nature seven day a week operations.

We have heard much in the debate about penalty rates and how, increasingly, industries are finding themselves having longer hours of operation. Notwithstanding all of that, many of us—certainly organisations such as the Australian Catholic Council for Employment Relations—also recognise that there is still an important premium to be placed on family time, on time spent engaging in activities with your family and loved ones. There is an important premium that attaches to public holidays. For those reasons, it is appropriate that wages represent that people are taking on work in what might be regarded as unsocial hours.

Penalty rates are included in industrial awards to ensure that employees who have limited capacity to bargain will not be compelled to work weekends or on public holidays. Ensuring that workers are paid appropriately—particularly low-paid workers—means that they are more likely to spend and contribute to retail spending, to contribute to hospitality spending, and to contribute to our economy as a whole. The false view that somehow this has solely a detrimental impact on our economy, is just that—a false view.

Those who are paid penalty rates, those who have additional money in their pockets, particularly people who are amongst our lowest paid workers, are more likely to spend in the retail sector, in hospitality and in other areas and thereby assist our economy.

It is interesting to reflect on community sentiments in relation to penalty rates. A Galaxy poll conducted in August this year found that 87 per cent of those polled considered that workers should be paid a higher rate of pay for working on weekends. Perhaps, unsurprisingly, the rate was 95 per cent amongst those in the under 24 age group, who presumably would be more likely to rely on casual work or who might work weekends. During my time as a student I certainly worked on weekends and in the evenings and was reliant, as many students today would continue to be, on penalty rates to make ends meet and to support myself. Many students and young people continue to do this today.

Australia has paid penalty rates for work on weekends and unsocial hours for almost 100 years. Many of those workers who rely on penalty rates are known to be not generally well paid. We know that certain times of the day and certain days of the year are especially important, and to work at those times means working unsocial hours. Although industries do increasingly operate around the clock, that does not lessen the impact of working unsocial hours. Most members, for instance, would acknowledge that time not able to be spent with their children is time they cannot get back. Most members would be interested to know that working night shifts can have detrimental health impacts, such as an increased risk of cardiovascular disease, in comparison with those who work day shifts. Things like poor nutritional intake are also more likely to go with that kind of shift work. We also know that studies have demonstrated that employees who work at weekends have reported significantly higher rates of job stress and emotional exhaustion than employees who do not take on weekend work. That is why this resolution is important. That is why the government recognises that adequate compensation for unsocial hours is reasonable, that penalty rates are important and that we continue to support them as a government.

We know that in 2011 around 400,000 employees covered by collective agreements approved in that year actually had agreements that specified ordinary hours of work between Monday and Friday and provided for penalty rates if work was performed outside these hours. I would hope that we can continue to support those employees who benefit from penalty rates, particularly the lowest paid workers. (Time expired)

Sussan Ley (Farrer, Liberal Party, Shadow Minister for Childcare and Early Childhood Learning) Share this | Link to this | Hansard source

I rise today to speak on this motion moved by the member for La Trobe. I am surprised to hear the member for La Trobe talk about secret views within the coalition, about a secret agenda to return to Work Choices, mentioning one single member of the coalition who had a certain view at a certain time in a certain context, and wrapping a giant conspiracy theory around the issue of penalty rates.

I was listening to the member for La Trobe, and I would like her to indicate where current coalition policy is attacking the issue of penalty rates; is saying that penalty rates are not an important part of the workplace landscape and family income; is saying that penalty rates do not in some way make up for the time spent away from children, from partners and for working unsocial hours. I see this as creating problems where none exist. Maybe it is an opportunity for the member for La Trobe to clarify her own stance on this issue, even though it does contradict that of her colleague the Minister for Tourism who is on the record as stating his concern for the tourism industry by the imposition of higher penalty rates when he claimed:

I hope the bench of Fair Work Australia has given proper regard to the input of the tourism industry in this context because I understand that is the key issue to industry at this point in time.

I do not know if the member for La Trobe and members opposite have taken a walk down the main streets of their suburbs, of their regional towns, of their capital cities on a Sunday or a public holiday in areas where tourism should be alive and well, but in fact is struggling badly.

If so, they would have seen it is a fact that coffee shops and cafes may be closed, that tourism outlets cannot afford to open perhaps because of the penalty rates they have to pay workers, that people who otherwise might be providing a vibrant activity on a weekend or a public holiday are not carrying out that activity. We would simply say that is part of a landscape that you must take into account as members of the government and as members of parliament and you must say, 'We need to take account of that and we need to listen to the concerns that are being expressed to us.' That does not translate into a secret agenda to remove penalty rates. It just translates into members on this side of the House recognising the pain that the small businesses they represent are experiencing and indicating that Fair Work Australia, as the independent quasijudicial body in this space, does have a role and a responsibility to take into account everybody's views in the submissions that are made to it, in the cases that are made to it and in the analysis it makes of what is actually going on in the workplace.

We do stand by the independence of that independent umpire, Fair Work Australia, to make the necessary declarations and statements and note all of the indications that exist around the modern awards process. It is vital that we strike that balance between compensating someone appropriately for their time when they can do work outside mainstream hours and ensuring that business does maintain its viability. There are businesses in this country that cannot afford to open on Sunday—restaurants, corner stores and clothing boutiques—and the real downside of this is that there may be people who are losing an employment opportunity as a result.

Regrettably, this government has overseen an increase in the number of people languishing on unemployment benefits, people who would be grateful for any opportunity to work. This comes from a government that, in the 2011-12 budget, promised an extra 500,000 jobs. As with so many promises from this Labor government, we are able to bear witness to yet another broken one with Labor failing to deliver. This is what the government should be focusing on: getting people off unemployment benefits and into paid work is really the priority. In particular I am gravely concerned by the high number of unemployed young people in this country. The youth unemployment rate for those looking for full-time work is 25.1 per cent, according to the most recent ABS data. That is an average of one in four, and there are some areas where youth unemployment exceeds 40 per cent. In Melbourne—and I am not saying it is in the member for La Trobe's own electorate, but it is not far away—youth unemployment does exceed 40 per cent.

I say to those opposite: please do not avoid this topic like the plague; this is what we should be focusing on. None of us wants to see a hefty portion of the young generation consigned to the unemployment queues. Many of these young people have just given up on getting a job at all. Those sectors that historically have hired larger numbers of teenagers are reluctant to hire, facing ongoing uncertainty—and retail is a prime example where employers are reluctant to hire. Government changes to apprenticeship incentives for part-time employees will further hinder employment opportunities for young Australians.

Those opposite should be looking at the big picture instead of seeking to distract with a debate on penalty rates when responsibility for the setting of these rates rests with this government's own creation, Fair Work Australia. We in the coalition do accept that Fair Work Australia is the independent umpire and we remind those opposite of this. The coalition remains adamant that the determination of modern awards rests with Fair Work Australia now and will continue to do so under a future coalition government. Certainly Fair Work Australia have a duty to ensure that they consider all the facts and the ramifications when setting the minimum wage and linked penalty rates. I have confidence that they are aware of their responsibilities at the broader level and I would like to see some indication from members of the government that they have the same faith in Fair Work Australia's process for setting modern awards including penalty rates.

If you go out into the community—and members opposite should be doing that and I am sure they are because we do need to stay in touch with what is happening in our small businesses, in our part-time working communities and with our students and with our families—you will see that increasingly businesses may be employing people for cash. This is where businesses would otherwise not be able to open or would refuse or choose not to open—like mum and dad businesses on the weekend—because they cannot pay the penalty rates that are scheduled.

But they may be employing people for cash. The cash economy is alive and well. That is not a good thing. It is not a good thing for the employment security of those it employs. It is not a good thing for long-term wages. It is not a good thing for the award setting process, the modern award system that Fair Work Australia is the custodian of. What it is is an indication that people are unable in many instances to work under the present system, in an economy that is struggling against increasing business uncertainty, that has such little confidence in the present government to deliver the right economic conditions for their prosperity, that is reluctant to employ people and that does not want to take that extra step to give a young person a go. Whether it be an apprenticeship, a traineeship, or someone on the long-term unemployed list, we rely so much on businesses to step up and help us create opportunities for this group of young people that are doing it so tough because the environment where they might otherwise just get a go does not exist.

In conclusion, it is fine for the member for La Trobe to bring this debate on penalty rates to the chamber today, but I would urge her and her colleagues to recognise the wider issues associated with a very flat employment market, particularly with youth unemployment—never mentioned, never discussed and apparently never understood by this government. They need to demonstrate that they do have confidence in their own independent umpire, Fair Work Australia, and that they will support a submission process from every sector of the community to that independent umpire with an outcome that results in benefits both for employers and employees.

Justine Elliot (Richmond, Australian Labor Party, Parliamentary Secretary for Trade) Share this | Link to this | Hansard source

I am very pleased to rise today to support the motion by the member for La Trobe, which recognises the importance of penalty rates. It particularly recognises the importance of penalty rates to our lowest paid workers and to those in our community who greatly depend on penalty rates as a very significant part of their income, and is an integral part of their income. Of course, the Labor Party has always had a very strong commitment to penalty rates and the rights and conditions of workers. We are also very proud of our record of job creation. We understand that penalty rates compensate workers for working shift work or very irregular hours. We understand the impact on individuals and we understand the impact on families. We understand there needs to be relevant and necessary compensation for those hours worked.

This is in absolute stark contrast to the Liberal-National Party, particularly in what we are hearing from them today. We know at a federal level they want to bring back Work Choices. We know that is what they are telling people and what they are saying. We know that that is actually their plan. When I look to my home state of New South Wales and the actions of the O'Farrell government, what we see there is workers' rights being stripped away. What we are actually seeing now in New South Wales with those rights being stripped away is a curtain-raiser to what a federal Liberal-National Party government would do right across the country.

These changes by the O'Farrell government are severely impacting the families in my electorate of Richmond in Northern New South Wales—their cuts are right across the board, but particularly their attacks upon workers. Of course, these changes in my area have had the full support of the local state National Party members; they voted to support all these changes. They have remained silent while the rights of local workers and local families are stripped away.

Penalty rates are an important additional payment to employees who work on weekends, late at night and on public holidays, and they have long been a feature of the Australian workplace relations system. Often the people who work these less family-friendly hours are among the lowest paid, particularly those workers in retail, hospitality and the services industries. The fact is that penalty rates comprise a very vital part of their salaries. Also, many emergency services workers—such as nurses, police, ambulance officers or firies—work irregular hours, and they deserve to be compensated as well.

I have often believed that you cannot have a full understanding of the challenges of shift work unless you have worked it yourself. As a former police officer, I spent many years working in shift work, and I understand very well a lot of the challenges and difficulties in working irregular hours, and some of the impacts that can have upon individuals and upon their families.

Fair Work Australia has reviewed public holiday and penalty rates provisions in a number of modern awards, as part of its two-year review of the awards. Under the Fair Work Act there are a range of ways to manage penalty rates, including through higher base rates of pay or annualised salaries as well, as long as the employee is better off overall—that is what is important—because removing penalty rates is a gross injustice, and that is exactly, as I have said, what is happening in New South Wales at the moment.

Since coming to government in March 2011, the O'Farrell Liberal-National Party government have made a devastating number of cuts to jobs, to funding, to workers rights and to services. We have seen them strip away public sector workers' rights and cap their wages. We have seen their plan to sack 15,000 workers from New South Wales hospitals, schools, child protection services and fire stations. Important frontline services will be devastated. We are seeing cruel cuts to community services and to disability services. This all comes on top of their massive $1.7 billion in cuts to schools in New South Wales, and every child in every school on the North Coast will be impacted.

We have also seen the O'Farrell government fully strip the New South Wales Police Force of their death and disability protection, destroying a very important safety net for police. We have seen them change the New South Wales Workers Compensation Act in order to reduce support and compensation to injured workers. We have also recently seen the O'Farrell government's plan to change 38 workplace awards, to cut leave-loading entitlements, parental leave, sick leave and penalties for shift workers. The O'Farrell government are systematically destroying workers' rights and, in doing so, they are vandalising local jobs and communities. The attacks just go on and on.

While all this devastation continues to occur, we hear absolutely nothing from the local state National Party representatives on the North Coast. They remain silent. The members for Tweed, for Ballina and for Lismore remain silent while services are being ripped away. But that is in fact the National Party way: hide out, pretend that it is not happening, hope that nobody will highlight it and do not admit to people that what you are supporting, what you are voting for, is severely impacting the lives of the people on the North Coast. What it shows to locals on the North Coast is that, at both the state and federal level, you just cannot trust the National Party. As I said, what we are seeing at the state level in New South Wales is a curtain raiser. It is the precursor to what we will see from a Liberal-National government at the federal level.

Teresa Gambaro (Brisbane, Liberal Party, Shadow Parliamentary Secretary for Citizenship and Settlement) Share this | Link to this | Hansard source

I have just heard the member for Richmond turn a speech which was supposed to be on penalty rates into a far-reaching political attack on every aspect of every delivery program of every state government. I am going to speak on what the motion is about, which is penalty rates. I rise to speak on this motion brought forward by the member for La Trobe. This motion is particularly relevant to me in the electorate of Brisbane, which has some of the major restaurant, CBD and other hospitality precincts, including James Street in Fortitude Valley, the Caxton Street precinct and the fine hospitality establishments in the CBD. My electorate also has two very large campuses, being the universities based at QUT at Gardens Point and at Kelvin Grove, which have thousands of students. I know that a lot of those students work part-time in the hospitality industry, and I have had the pleasure of working with many students when I worked in the hospitality, restaurant and trade sectors many years back.

As we know, the hospitality and retail industries are arguably the most affected by the requirement to pay employees penalty rates for work outside of usual working hours. This motion is a political one. It is designed to try to pressure the coalition on an issue of penalty rates and industrial relations in general and, with great respect to the member for La Trobe, the motives behind bringing the motion to the House are very clear. The Minister for Employment and Workplace Relations has also engaged in this political game-playing through a ministerial statement that he made to the House on 18 September. No amount of political game-playing or workplace bingo will change the fact that the coalition's position on penalty rates is very clear. We believe that the industrial umpire, Fair Work Australia, should make the decision on penalty rates and individual awards after hearing all of the submissions and balancing all considerations. After all, that is their task. Fair Work Australia is an independent umpire and is currently undertaking a review of modern awards, and part of that review is the consideration of submissions in relation to penalty rates. It should be Fair Work Australia that makes the decisions on penalty rates and individual awards, after considering the full range of submissions, and not the parliament.

It is very clear from feedback from the hospitality industry in particular that more flexibility is required. We know consumer expectations are that of a 24/7 trading environment, we know that the modern lifestyle is a lot different from what from that 20 or 30 years ago and we know that limiting the capacity of businesses to trade in the evenings and on the weekends can significantly undermine the capacity of those businesses to be viable. I recently became aware that a favourite little restaurant/cafe near my office has announced that it will not be open on a Sunday because it just is not viable. I know the local community is really disappointed because it is a great little cafe.

However, as I have said, our position is that we respect the decision of the independent umpire on regular reviews into modern awards and applications to vary those awards.

However it is not clear what the decision on this issue is within the Labor Party. After reading this motion and hearing Minister Shorten's recent remarks, imagine my surprise when I read an article on ABC News online, which said, 'Tourism minister backs penalty change push'. It went on to say:

Martin Ferguson told delegates at a national hospitality conference in Hobart he has received many appeals from businesses struggling to pay weekend loadings and penalties.

He said weekend and public holiday ''penalty on penalty" issues were a major obstacle for the industry in challenging economic times.

The minister said it was important the penalty provisions were considered in Fair Work Australia's review which was expected to be completed by the end of the year.

So we have it there. On one hand we have the workplace relations minister and the member for La Trobe saying that we should oppose any measures that undermine or remove penalty rates, and then we have the tourism minister saying that the umpire should give proper regard to submissions to remove penalty rates by the tourism industry.

In conclusion, the importance of penalty rates to some low-paid workers in our community is very important. However flexibility is needed and that is why the coalition believes that Fair Work Australia should make the decision on penalty rates and not have the waters muddied by politically motivated motions like this one.

Mike Symon (Deakin, Australian Labor Party) Share this | Link to this | Hansard source

I speak in support of this motion moved by the member for La Trobe. For a working person bringing home a wage, finances can often be tough especially if that person does not have the benefit of an enterprise agreement to lift their wage above award levels. Allowances, loadings and penalty rates really do make a difference to the pay packet at the end of each week.

As a wage earner for over 20 years before coming to this place, I can certainly speak from experience. Working overtime on a Saturday or a Sunday meant that rather than just paying the household bills and living week to week, some money could be saved, maybe to put on the mortgage, maybe to take the family out to dinner, or maybe even to put some away for a family holiday. Working night or afternoon shifts or abnormal hours on weekdays also brought financial rewards but, as others have already noted, at a cost to quality time with one's family.

On 16 August this year, Senator Nick Xenophon introduced a private member's bill into the Senate titled Fair Work Amendments (Small Business-Penalty Rates Exemption) Bill 2012. That bill and the explanatory memorandum started with the completely false argument that the Monday-to-Friday week is now outdated. With that, the senator went on in the explanatory memorandum to claim that many part-time or casual employees consider weekends to be part of their regular hours. To me, weekends have never been part of regular hours when it comes to work; they have always been on top of regular hours. With the stated intent of ripping off workers of their overtime penalty rates, the Xenophon bill is just as bad in this area as the widely-hated Work Choices that was consigned to the rubbish bin by this Labor government. It is a bill that is nothing but a blatant and disgusting attempt to rob wage earners of their hard-won entitlements and money in their pockets.

It was not the workers in the hospitality or retail sectors that saw extended shop trading hours. We all know it was the bosses who over many years fought a long and, I must say, largely successful campaign to remove state based restrictions on trading hours. Now they have what they wanted in just about every state and territory. But of course it is not enough. They have decided that their employees get paid too much to work the hours that most people spend at leisure or sleeping. The Xenophon bill would steal these conditions from workers, conditions that have been fought for and earned over decades.

Indeed, as far back as 1909, Justice Higgins in the Conciliation and Arbitration Commission awarded the penalty payment of time and a half for the seventh day in any week or an official holiday and for time of work done in excess of the ordinary shift. By 1960, all awards had provisions for extra pay for overtime including the payment of double time in certain circumstances. By 1981, the federal Department of Industrial Relations had outlined a community standard that had time and a half paid for the first three hours of overtime and double time after that beyond the eight ordinary hours, time and a half for Saturday work, and double time for Sunday and public holiday work.

Some of these provisions have been built upon since that time, but others have been cut in some awards, such as the Hotels, Resorts and Hospitality Industry Award of 1992.

The attacks on working people's wages and conditions from conservatives, from the Liberal Party, from the employers and their associations have never stopped and, I am sure, they never will.

Indeed, it was the Kennett government in Victoria that prohibited the inclusion of penalty rates in awards in 1992 and continued this for the 356,000 unfortunate employees who were transferred from the state to the federal industrial system in 1996 under the notorious schedule 1A of the Workplace Relations Act. The Howard Liberal government introduced Work Choices in 2005—a system that was designed specifically to rip off conditions from workers not covered by enterprise agreements.

I note that in the 2008 book entitled Fair Work: the new workplace laws and the Work Choices legacy, Professor Andrew Stewart and Anthony Forsyth provided an excellent example of this. They said:

Thus under WorkChoices it became possible to employ workers under statutory agreements which did not give entitlements to overtime payments, night shift penalties, weekend penalties or public holiday penalties. In the retail industry, for instance, the number of workers on Australian workplace agreements who were entitled to overtime penalty rates fell from 54% to 35%.

The Xenophon bill is just another in a long line of attacks on the working people of Australia that seeks to restore an essential component of Work Choices by destroying penalty rates. I commend the member for La Trobe for bringing this important private member's motion before the House, because an issue that should have been settled many years ago is still on the agenda and working people deserve to get a payment for working the times that other people do not.

Karen Andrews (McPherson, Liberal Party) Share this | Link to this | Hansard source

Let me start by saying that penalty rates should not be a penalty on employers for providing work. A review of the proper application of penalty rates is well overdue and the time has come to move away from entrenched views and positions and to look at the organisation of work to ensure that the system that is in place is one that is conducive to employment and supports the creation of job opportunities rather than acts as a disincentive for employment.

There are many key issues that I would like to cover today, including the changes to the way work is organised, changes to preferred working patterns and the current levels of underutilisation that could be addressed through changes to the application of penalty rates. The days when work was organised to fall generally between the hours of 9 am to 5 pm Monday to Friday, with perhaps Saturday work from 9 am to 12 noon, are long gone. This is the case in many of the industry sectors, but let me just start today with the retail sector where the trading hours for major shopping centres are indicative of the pattern of work for much of the retail sector.

Most major centres around the country operate Monday to Wednesday, 9 am to 5.30 pm, which has been reasonably standard for a number of years. On Thursday and Friday there is generally late night trading from 9 am to 9 pm. Saturday is all day, from 9 am to 6 pm; and Sunday, 10 am to 5 pm. Over a period of seven days, major shopping centres are generally open for about 65½ hours. These hours of operation are a far cry from the days when the retailers were open for 40 to 45 hours a week. The 65-plus trading hours of the major shopping centres are reflected at small local centres that are competing with the major operators. For most retail traders, the cost of their merchandise remains constant, irrespective of the day that it is sold. For example, a shirt costs a customer the same amount on Monday as it does on Sunday, but it costs the retailer much more to sell that shirt on the Sunday than it does on the Monday, and that is because of the increased cost of labour as a result of penalty rates. The retailer cannot pass on this additional cost and therefore they must absorb it.

For restaurants and cafes, core trading times are predominantly evenings, Saturdays and Sundays, when penalty rates are highest. So, again, business operators are being penalised for operating during their peak periods. These are times when many businesses would prefer to have more staff but simply cannot afford to do so, and a significant contributing factor is the penalty rates that apply at those times. For those businesses that are dependent on the leisure and tourist trade, their core operating hours are not necessarily 9 am Monday to Friday either. It is weekends where, again, they pay a premium for operating during their busiest periods.

In many industries the services are required at anything but nine to five on Monday to Friday. They are required during the evenings and weekends when there is a premium that needs to be paid by the employer that in many cases simply cannot be passed on to the customer and must be absorbed. This leads to the question of how best to respond to the increased hours of operation that the community now expects. I accept that many people wish to work nine to five on Monday to Friday but there are many others who prefer to work on weekends and at other hours during the week. This is the case for students and also for the second earners in the family, primarily women, who have care of their children whilst their partner works during the week but would be available and willing to work on weekends when their partner could care for the child or children and the burden of childcare costs is therefore reduced. But the quantum of penalty rates means that opportunities to work during times that suit these potential workers are limited. This is adding to the already high levels of underemployment and underutilisation that we have in Australia.

We know from ABS data that underemployment, where individuals who are currently employed are willing and able to work more hours, has increased from 6.4 per cent in August 2007 to 7.2 per cent in August 2012. The underutilisation rate, which combines the unemployment rate and the underemployment rate, shows an increase from 10.8 per cent in August 2007 to 12.4 per cent in August 2012. When penalty rates are considered against this background, it is clear that we cannot continue to operate in the 21st century with terms and conditions of employment that reflect an era that is long gone. I am not advocating the total removal of penalty rates but I am saying that it is imperative that we move from entrenched positions, recognise consumers expect services to be available for extended hours, recognise the high level of underutilisation of labour that we have in this country, and recognise that a high quantum of penalty rates for Saturday and Sunday work will act as a disincentive for employment. (Time expired)

Jill Hall (Shortland, Australian Labor Party) Share this | Link to this | Hansard source

It gives me great pleasure to rise to support the member for La Trobe's motion. In doing so, I would like to congratulate her for highlighting the really key issues that surround penalty rates. It has become quite obvious to me, while listening to this debate, that members on the other side of this parliament do not understand the issue of what it means to workers to actually work on public holidays and do not understand low-paid workers who rely on penalty rates so they can just survive. It is all very well to argue about the price of a shirt on a Monday and on a Saturday, but I would like to respectfully argue that any retailer factors in that cost when they are working our their margins.

People on low incomes really rely on the penalty rates they receive, for working at night or for working on a Saturday or a Sunday, to be able to meet their mortgages. Many on the other side do not understand that. They just do not get it. They do not get the fact that taking away penalty rates is a direct assault on the take-home pay of hundreds of thousands of Australia's lowest paid workers. If you were to take away penalty rates that would immediately result in a significant drop in their standard of living. These are not people who are on $100,000 or $200,000 or even $80,000 a year. These are people that battle each and every day to put food on the table, but the opposition argues that these lower paid workers should not receive penalty rates.

I would also like to put on the table that there are many workers who work in essential services. In actual fact I have a daughter-in-law who is a nurse and has worked over the years many a night shift. She has worked on Christmas Day, when she has had young children. The members on the other side of this House are arguing about people like her—so all those nurses that go along and work in accident and emergency departments and all those nurses that go along and look after the sick in hospitals and all those police who are out in the community and all the fire service workers who are out there keeping us safe on those very special days and all those people who are unable to be there for Christmas lunch—and I say to them it is not all about business. Business is important and we need businesses as employers but we also need workers to work in those businesses and for workers to have money to spend.

If workers' wages are reduced by taking away penalty rates, that will impact on businesses as well. It is not all about pushing workers' wages down to the lowest possible level.

Listening to the debate here today, that is what those in the opposition want to do. They have got no respect for workers. All they would like to do is keep wages low and increase employers' margins. They would like to remove the existing safety nets and entitlements. Every time an opposition member rises to speak on any industrial relations issue, they always attack workers' conditions. I have been in this parliament quite a while now and I have never heard a member of the opposition stand up and say that workers deserve a better deal. To be quite frank, opposition members do not support workers, they do not believe they should penalty rates, they do not acknowledge the fact that they should be compensated for working on those special days and they do not understand how important it is for workers to be able to earn that little extra money that they need to pay their mortgage and put food on the table.

I would like to conclude by congratulating the member for La Trobe for bringing this to the parliament and put on the table the fact that I oppose 100 per cent the removal or undermining of penalty rates. I suggest that opposition members start to rethink their position on this issue.

Ken Wyatt (Hasluck, Liberal Party) Share this | Link to this | Hansard source

Let me say that I do not think there would be any member in this chamber or in this parliament who would not consider workers. They are absolutely critical to our economy and the way of life that we have come to experience. I rise today to speak on this important motion. It is important because once again it shows the hypocrisy and confusion that exist within this government. On 1 July 2009 Fair Work Australia commenced operations. It was set up by this government as an independent body with powers to carry out a range of functions relating to the safety net of minimum wages and employment conditions, enterprise bargaining, industrial action, dispute resolution, termination of employment and other workplace matters. Fair Work Australia was given a wide scope by this government to independently determine policies that are in the best interests of employees and employers. This motion seeks to undermine that independence by calling upon this house to reject any recommendations that Fair Work Australia may take regarding penalty rates. Either this government trusts Fair Work Australia to act in the best interests of both employees and employers or the question must be asked why did this government set up Fair Work Australia in the first place. If the government is not even prepared to listen to what Fair Work Australia may have to say on penalty rates, why do taxpayers' dollars continue to be spent reviewing the penalty rate system?

Further confusion on the government's position came about from Minister Ferguson's comments at the Australian hospitality conference where he said that he hopes a review of awards by Fair Work Australia will ease wage pressures on the hospitality sector. If the minister wants wage pressures reduced, does that mean he wants penalty rates cut or the award rates themselves? Either way this comments terms in opposition to the purpose of this motion moved by the member for La Trobe. Small businesses in Hasluck and right across the country are hurting because of this government's policies. Need I remind members of the effects of the carbon tax on small businesses. Electricity prices rising by 15.3 per cent for the September quarter alone has a significant impact. Consumers are being hit by the effects of the carbon tax as well, which reduces their ability to spend. To protect the Treasurer's promised surpluses we are seeing cash grabs left, right and centre. On the Today show last Tuesday the Treasurer refused to rule out further taxes. All this adds up to a government that is desperate and desperate to cling to power at any cost. This government will put forward any policy that they think sounds popular regardless of its merits. The reverse is that they will cling to any popular sounding policy and would dismiss out of hand what Fair Work Australia may have to say. Let them do their job and assess what is best for the economy.

Once we have the advice, we can then debate not just penalty rates but all the recommendations that Fair Work Australia provides in the review, based on facts rather than on populist positions.

A point that my colleague the shadow minister for employment and workforce relations, Senator Eric Abetz, has made in the past is that, if wage costs are too high, businesses may not be able to hire as many staff as they would like. We do not know yet what Fair Work Australia might recommend with regard to penalty rates. They may suggest increasing standard award rates while removing penalty rates, because to do so would see an extra 100,000 people employed. Do we really want to rule out any changes to penalty rates before seeing what benefits might flow from them? Would not a more prudent and wise choice be to see what recommendations Fair Work Australia puts on the table?

In case there is any doubt, our position is clear and has been stated on a number of occasions by the umpire: Fair Work Australia, after hearing all of the submissions, should make the decision after balancing all considerations. Certainly on matters arising from the review by Fair Work Australia, it would be my intention to consult within my electorate all the relevant parties in order to seek perspectives and viewpoints in respect of each of the recommendations and to reflect those positions within the parliament and within the processes that will occur. But the government has to be serious and, particularly given that it is the Prime Minister's handiwork in creating a structure that allows for Fair Work decisions and the Fair Work process to occur, we should take note of the review and recommendations that Fair Work brings forward in respect of penalty rates and other issues arising from the review.

Stephen Jones (Throsby, Australian Labor Party) Share this | Link to this | Hansard source

I would like to start by commending the member for La Trobe for bringing this important matter to the House. I sat and listened with interest to the member for Hasluck in his contribution to this debate and, if he speaks on behalf of the entire coalition, I have to say that I welcome their sudden affection for the independence of tribunals and courts in general and for the independence of Fair Work Australia in particular. I know that there are at least two members of this House who would welcome that affection for the independence of those courts and tribunals.

As the motion states, penalty rates are compensation paid to employees for working outside normal day and weekly hours. The framework of penalty rates reflects the longstanding idea that not all hours of the day and not all days of the week are the same. Despite the commercialised nature of the world that we live in, some parts of the week are still largely regarded as the preserve of family, and I have to say that I hope that that remains the same. It is good for parents to have time with their children outside the traditional working week, when the pace of life is less hurried, even if it is to do nothing more than to take their kids to a game of sport or to spend time in the backyard with their families. For those who do need to work during this time, it is right that they have an additional payment for the sacrifice to be at work when others are at rest or at play.

Different rates of pay are a fact not just of workplaces but of businesses in general. Many sectors, including airlines, tourism operators, cinemas, electricity companies and taxi companies, to name just a few, feature different pricing arrangements depending on the time of day or the season. Indeed, they have spawned a whole language, with terms such as shoulder rates, peak season, off-season, low time and matinee rates. So to pick on workers and say that, somehow, workers' rates should be treated differently from all those others, I say, is simply unfair.

We have heard much from those on the other side of the House, much wailing from the coalition, on the cost-of-living issues. These are crocodile tears indeed. The hypocrisy of those opposite when it comes to cost-of-living issues is nothing short of astonishing. They argue for flexibility, which we know from our bitter experience during the Work Choices years is simply code for reducing wages. The only cost-of-living issues they seem to care about are those of the big end of town. On this side of the House, we are concerned about those who draw their living from ordinary toil and those who earn penalty rates as a part of their essential take-home pay.

I want to say something about the catering and restaurant industry, an important sector within our economy and indeed within my electorate. I know it is a contentious issue, particularly in the hospitality and business sector, and there is a campaign being waged against penalty rates. It is indeed highly political. Managing staff in these areas can be difficult, and I know that businesses in this sector are struggling from time to time, particularly as there are downturns in the economy.

I have to say that not everyone within the industry accepts the position that has been taken on by the association. I recently received a letter from a constituent that confirms that he takes a different point of view. My constituent says:

I am appalled at this campaign as I know the hospitality business and in fact all businesses thrive on points of difference, be that service, location, atmosphere et cetera. We are advised by many business gurus that we should not sell our wares and services based on price alone. I can only see that ridding workers' pay packets of weekend penalty rates puts more money in the pockets of the business owner. Then if we continue to compete on price we are no better off in terms of market share.

He goes on to make many observations about the fact that reducing workers' wages reduces the income people have to spend in his establishment.

Australia has a proud tradition of egalitarianism. That tradition is threatened by the rising gap between the richest and poorest in this country, as recent reports by non-government organisations have testified to. In 1994-95 households on the top 10 per cent earned an average of 3.78 times more than the bottom 10 per cent but the latest survey in 2009-10 shows that this has grown to 4.21 times. We in this House should be doing everything we can to ensure we are reducing the gap between the top and the bottom, not increasing it. Penalty rates for most workers who earn them are a critical part of their take-home pay. Once again I commend the member for La Trobe for bringing this matter before the House. There is no conflict between us debating this here and having it independently arbitrated somewhere else.

Karen Andrews (McPherson, Liberal Party) Share this | Link to this | Hansard source

I have already spoken on penalty rates but this topic is clearly of significance to all Australians. I have some additional points I want to put on the record, and I will take this opportunity to do that now. When I spoke earlier I talked about ABS data for underemployment and the underutilisation rate we have in Australia. I think that deserves a little more expansion.

The underemployed are individuals who are currently employed but are willing and able to work more hours. These are predominantly your part-time workers. For example, they may be working 20 hours a week but could be working 24 or 30 hours a week but they just cannot find the work to be able to do that. That is who fits into the underemployment category generally. That rate increased from 6.4 per cent in August 2007 to 7.2 per cent in August 2012.

The underutilisation rate is somewhat different because it picks up the unemployment rate and the underemployment rate, so it represents all individuals who are willing and able to do more work regardless of their employment status. It does not pick up a number of statistics that really should be represented in there. My point here is that the underemployment rate and consequently the underutilisation rate are not really reflective of what is happening in industry and in the population at present because there are some individuals and groups of people who are not represented in the statistics, so, in fact, the rate could be significantly higher. Those people could in some cases be students, second earners and older Australians, who would all be ready, willing and able to take on additional duties in a part-time capacity or for just a couple of hours on a Saturday or Sunday. These people are out there and they are ready, willing and able to work.

As we all know, employment provides more than just remuneration; it provides a whole range of benefits, including self-esteem and self-worth for the individual. I strongly believe that we should be doing what we can to provide opportunities for those individuals to contribute and to earn money. It is very important that we look at what we are trying to do with the whole penalty rates review and make sure that that addresses those issues in particular so that we are actively enabling people to be employed within the community.

I also spoke previously about tourism. That is an enormous sector of our work on the Gold Coast where my electorate of McPherson is based. For many of those tourism businesses and the businesses that support the tourism sector, their busiest days are Saturdays and Sundays, and it is not just because of tourists, it is because of many locals as well. Some examples would be the wildlife parks and the theme parks et cetera. School holidays are clearly a very busy period simply because of the increased numbers of tourists, but there are also numbers of locals holidaying at that time. But today if we speak specifically about the Saturdays and Sundays, that is the peak period for these parks and that is where the penalty rates apply, creating some real issues with the profitability of those businesses. The rates they charge for entry to their parks on Saturdays and Sundays are generally the same as they have to offer to visitors on Monday to Friday. But Mondays to Fridays are certainly not busy days and they struggle during those days.

What needs to be reviewed as part of the ongoing investigation and analysis of penalty rates is how we can review what is happening in our key industries such as tourism and make sure that we are balancing the needs of the employer and the needs of the employees and needs of our future workers, ensuring that we are coming up with something that is going to be sustainable into the future.

Debate adjourned.