Nick Champion (Wakefield, Australian Labor Party) Share this | Link to this | Hansard source

I move:

That this House acknowledges that penalty rates are relied upon by Australian workers and their families to cover everyday costs of living, no matter if they are full time, part time or casual, including workers such as:

(1) nurses;

(2) police, firefighters and ambulance officers;

(3) retail and hospitality workers;

(4) manufacturing industry employees;

(5) services sector employees; and

(6) tourism and transport industry employees.

We all know that the decision by the Fair Work Commission relating to penalty rates has been delayed, reportedly so employers can provide additional submissions to their case. That would, to my mind, only prove that their case has not been made. We know that a whole range of workers, from police to nurses, retail and hospitality workers, and everybody in between—really the bulk of the Australian working and middle class—rely on these penalty rates, if not for themselves then for their partners' or their children's income earnings.

We know that during the election there was a lot of crab crawling away from some parties' positions on penalty rates. We know the Liberal Party has, in the past, been wildly enthusiastic about cutting penalty rates. We know that from the experience under Work Choices. We know that they first ran a mile and then crab crawled away from it. We know that the Nick Xenophon Team had a similar position. We know that these parties, which are essentially conservative parties and have been enthusiasts for cutting penalty rates, have been trying to obscure their positions by some sort of latter-day conversion to a commitment to the Fair Work Commission and its role as umpire in this situation.

For my own mind, it is easy to quantify what penalty rates mean to an individual worker and it is easy to quantify what they mean to an individual business. I often chat to cafe owners and they express a desire to cut their penalty rates. They say, 'If I could cut my penalty rates, I could put an extra person on on Sunday,' and I say, 'That might work for you as a sole business if you operated in a vacuum where no other business was doing the same thing, but if Coles and Woolies and all the big employers and the state governments are all cutting their penalty rates who do you think's going to be shopping at your store? Who's going to be buying the cups of coffee?' This is often something that is lost on them. They often do not think about that broader situation.

Interestingly, the McKell Institute, in an analysis in 2015, observed that if penalty rates were cut—and 18 per cent of rural workers work in retail and hospitality—then rural Australia would lose between $370 million and $1.55 billion each year, depending on the rate of cuts to penalty rates and the level of local ownership in retail stores. It also estimated that it would reduce disposable income in regional areas by between $174.6 million and $748.3 million. So you can see that cuts in penalty rates do not just affect individual workers; they affect whole communities and whole communities' economies.

In South Australia, where we have quite a big independent retail arm in the case of Foodland and, in my own community, the Barossa Co-op, the effects would be somewhat moot. But, even so, we have a number of the big chains—Woolies, Coles and Bunnings—who receive regular pay rises and receive penalty rates. Of course, if they were able to cut them, then we know regional economies like South Australia would be affected.

What we have here is the opportunity for this parliament—and I extend the opportunity for the Liberal Party and for the Nick Xenophon Team to do what Labor is doing—to express to the Fair Work Commission the importance of penalty rates and, in a formal opposition to cuts to penalty rates, to express to them just how important a part of the income of workers these are, and how important it is for regional and rural economies and for Australia's social fabric that these penalty rates remain in the national awards and in our social and economic ethos to make sure that there is fairness and wage growth in the economy. Previous speakers have talked about the lack of wage growth in our economy being a problem not just for those individual workers but for the economy as a whole. Fairness is essential for growth and growth is essential for fairness, and we know that the two things increasingly go arm in arm. That is why we should resist any proposition to reduce penalty rates across the economy.

Russell Broadbent (McMillan, Liberal Party) Share this | Link to this | Hansard source

Is the motion seconded?

Anthony Byrne (Holt, Australian Labor Party) Share this | Link to this | Hansard source

I second the motion.

Russell Broadbent (McMillan, Liberal Party) Share this | Link to this | Hansard source

And do you reserve your right to speak?

Anthony Byrne (Holt, Australian Labor Party) Share this | Link to this | Hansard source

Yes.

Andrew Laming (Bowman, Liberal Party) Share this | Link to this | Hansard source

If anyone has been keeping a tally, this would probably have been the most popular debate in this place over the last decade. Hearing the two sides trot out the same ministerial talking points can get a little tedious, so I want to stray a little, if I may, from the issue of penalty rates to the bigger picture of whether employees are better off overall with rising standards of living, income and economic growth, which have to be the focus on this side of the room.

Penalty rates are the big selling card of union membership, and we know why those from the other side of the chamber have to perennially push the topic. But, in reality, when we know that an employee can look at their salary and see it increasing, whether it happens on a Friday, a Saturday or a Monday is not terribly germane to them as long as over the pay cycle they are better off overall. Of course, this is something that the unions will simply never move away from because it is, as I have said, their calling card to union membership, so we understand where they are coming from.

In the Capalaba Sports Club a new salary agreement was trialled last year, one that had been approved in the Fair Work Commission by none other than the then head of Unions New South Wales, who ticked off on the agreement saying that it left workers better off overall—and I will repeat that phrase regularly to remind those on the other side. It caused world war III in Queensland when the agreement was rolled out in a community club. Of course, employees did not quite understand, because in most cases their pay was no different. It was just that they were paid more through the week, and the large penalty rates on weekends came back to just $6, $9 and $12 per hour bonuses on top of the hourly rate. If you increase the weekday salary then it is all swings and roundabouts and the salary is no different, and most employees are smart enough to see that.

If you are a union member, though, and you need to find a fight, then fighting for penalty rates is about all you have left, so I do not blame them for doing it. So what did they do? They called in Fair Work. They got an order from Fair Work and raided the club to look at their pay sheets. This raises one very important question: why are unions picking over the pay forms of non-union members at work? Why should non-union members have unions crawling all over their salary slips and their pay forms? Why should they be photocopied and taken out of the employer's office with tax file numbers on them, for goodness sake? How do I know that privacy is being protected when unions crawl over pay slips on the pretext that they are checking whether the employer is doing the right thing? That is a definite issue of privacy for non-union members that is not currently protected in the act.

A second issue is that when you know where these teenagers live the next logical step is to go and knock on their doors, which is precisely what happened. Unions, calling themselves official investigators, went around to the homes of teenagers and told them, 'You are thousands of dollars worse off because you are not getting your penalty rates.' That is an abject falsehood, but you will say anything to get a new member, so of course you would do it. Trying to purloin union membership using home address details that potentially are not removed before they are handed over is a genuine concern. I think it is a far greater concern than whether you are paid your salary on a Saturday, a Monday or a Friday. If you are better off overall you would be way more worried about having pay slips under the arms of official union investigators. What on earth are those positions? Where does that exist in the act? But, no, there they are, leaving their business cards under doors: 'Your child would be way better off as a union member, and they are thousands of dollars worse off.'

Your leader—this Leader of the Opposition—had the temerity to bring one of those employees down here and make out that they were thousands of dollars a year worse off. When challenged, they simply said, 'Oh no; she said she was worse off, so we just took that at face value.' Then there was a Facebook post with two payslips showing that the amount was the same but they could not see a penalty rate on the other side because they were paid more through the week. This is a simple and better overall test that everybody understands. This is a pay agreement approved by a Labor New South Wales commissioner; but, no, 'We'll fight that one to the hilt.'

So what do we know? We know that if we touch penalty rates we will be off to the Federal Court. We know that cashed-up unions have really got nothing else to fight for and so they take on small cafes and clubs, because they know they have got deeper pockets. In the end, it is the employers who know they are paying better wages and the employees know they are getting the same amount of salary. This beleaguered club dropped the agreement because they could not afford to go to the Federal Court. The next week: out came the old award pays, and all the staff looked at their payslips and said, 'But are we getting no more money?' That is right, because you were never getting any less. You are better off overall. This is a fight unions will have as long as we have unions. (Time expired)

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

It certainly is a fight we are going to have—a fight for working Australians whose working conditions and basic pay levels are under attack from this government and plenty of their acolytes in the business community every day of the week. So we relish the opportunity to talk about penalty rates. We understand that penalty rates are not only important for the 4.5 million Australians who receive them but also important for our economy. What do we get from the apologists opposite—those opposite from the trickle-down brigade? They went to the people of Australia at the last election with their stunning proposal of a $50 billion tax cut for the wealthiest companies in the world, including a tax cut for the big banks of $7 billion, as if that is going to produce jobs and growth. This just demonstrates how out of touch they are.

One thing that the last election did was demonstrate that the Australian community will not buy your trickle-down economics. They are heartily sick of it. In fact, around the world, organisations such as the International Monetary Fund and many other reputable authorities have pointed to the trickle-down program as not only being a source of lower economic growth but a source of political polarisation right around the world. Exhibit A here is the economy of the United States, where the wages of the middle class have been ripped to shreds in recent years and greater armies of working poor have been created on the back of a minimum wage of $7 or $8 an hour.

Those opposite come into this House and argue that we should take down our minimum wage; we should erode the pay and working conditions of some of the poorest people in our community by ripping into their penalty rates. I can tell you this: we relish this debate. We want to have this debate with this government no matter how long it lasts, because we know if we go to the people, particularly on the question that the member for Bowman went on about before, we will thump you out of your seat. Even in your seat there are middle-class families that benefit from penalty rates. You somehow think that penalty rates are just about a few young workers, who you do not mind exploiting. Penalty rates build the wage of many middle-class families in our community: kids who are going university; second income earners who are reliant on a few extra hours a week. You erode the middle class in this country at your peril. They know what you are up to now, because they can see penalty rates as being the leading edge of the reintroduction of Work Choices in this country. It is an attack not just on penalty rates but an attack on minimum conditions right across our workforce. They will not cop it.

When you offer an obscene program such as the one you took to the last election of a $50 billion cut for large corporates, nothing really for small business and certainly nothing for people on modest incomes, when you attack the conditions of 4.5 million Australians, you have a fundamental impact on confidence in the economy and you have a fundamental impact on growth in the economy. A middle class is not a consequence of strong growth; it is the force behind strong growth in an economy. Well-paid workers such as we have had in the main in this country for the last 30 years have been a source of that growth. With our economy now 20 per cent larger than it was at the end of 2007, it is a fact that they have been the source of growth. But in other countries which have gone down the trickle-down road, like the United States with huge armies of working poor and right across Europe where they do not pay or respect people properly, their economies are not doing well.

The workforce does deserve some respect and at the moment in relation to the Commonwealth public servants and their role in the public sector of our economy you, the government, have no respect for your own workforce. You are out there ripping into their working conditions, trying to give them a real wage cut and somehow pretending that is good for the economy. It is not good for the economy. But I will tell you what: it is also not good for trust. Trust is the very basic secret ingredient that makes good economies work. So when you show so much disrespect to your own workforce, when you have a record of putting in place Work Choices, the Australian public know what you are really on about. So do not come in here and preach about small business. Small business depends on the purchasing power of the low- and middle-paid in our community if they are going to do any business. And do not go on about coffee shops. Who is going to buy the coffee if you continue to erode the wages and working conditions of the people— (Time expired)

Craig Kelly (Hughes, Liberal Party) Share this | Link to this | Hansard source

What a disappointment we have had here this morning! At the first chance the member for Wakefield has to come into this new parliament and put up a motion that tries to tackle the problems that we have in this economy with our growing debt what does he resort to? It is the old scare campaign, the old 'create the bogeyman' and the old, 'They're taking away our penalty rates.' What an embarrassment and disappointment it must be to the people who elected the member for Wakefield.

Let's get something very clear: there is absolutely no proposal coming from anyone on this side that the penalty rates of nurses, police, ambulance or emergency workers should be touched one iota. It is simply another scare campaign. Why is there a scare campaign? It is to try to get people to vote Labor and also to get them to cough up their union membership fees. It is to take their union membership fees and have that bogeyman and scare campaign out there.

It was very interesting during this debate on penalty rates that there was not a single word from anyone in the Labor Party about the rip-off of workers by the shop and distributive workers' union. Yes, $300 million was ripped off. Union officials signed off to rip $300 million off those workers. That is what the Fair Work Commission found. Those opposite should be embarrassed about that. They should come in here and apologise to all those workers from Coles and Woolworths for the $300 million—

Mr Champion interjecting—

Russell Broadbent (McMillan, Liberal Party) Share this | Link to this | Hansard source

Order! The member for Hughes will resume his seat. Members, it is getting a tad disorderly, and it is not a good example for the new members of parliament who are sitting here.

Craig Kelly (Hughes, Liberal Party) Share this | Link to this | Hansard source

Thank you, Deputy Speaker. I appreciate you bringing some decorum back to this chamber. It is an embarrassment for the Labor Party that they would come into this parliament and talk about penalty rates but not mention a word about how those workers got $300 million ripped off—the workers that they say they represent.

But with that crooked rotten deal they did with the shop and distributive workers' union, the SDA, they also put a lot of smaller businesses at a competitive disadvantage. So we had the big employers—Woolworths and Coles, the big chain stores—paying a lower rate of pay and these small businesses being forced under the awards to pay higher rates. You wonder why we have some distortions in our economy! You wonder why people worry about who the Labor Party truly represents! Do they stand for the actual workers, or do they stand for the union bosses? In this debate, that question has been answered.

One thing that the member for Wakefield seems not to understand is that the size of the economy can grow and contract, and the private sector will only employ someone if the value that they add is at least equal to the cost of their wage. If, in the tourism and hospitality sector, we set the penalty rates so high, they can actually act as a penalty and become a discouragement to employment. So instead of workers actually having money, as the member talks about, to cover their everyday costs of living, they simply do not have a job because the businesses have closed because of the level the penalty rates were set at in some of these industries. That is what needs to be addressed, and that is what the Fair Work Commission is looking at.

I would also like to comment on some of the comments by the member for Lilley, who was formerly the Treasurer of this country for six years. Is it any wonder, from hearing that speech, why our economy suffered for those six years. The member for Lilley seems to think that, if you reduce the corporate tax rate, it is simply a handout. I would ask the member for Lilley to go back through the records for the last 30 years and look at what happened when the Hawke and Howard governments reduced company taxes. It was not a handout to big business. What happened when they reduced that corporate tax rate? It was around 49 per cent in the mid-1980s. When they reduced the corporate tax rate, do you know what happened? We actually got more corporate tax paid! That has been the effect every single time that we have reduced the corporate tax rate. When we have reduced the tax rate, more tax has been paid because people have been prepared to take a risk with their money. That is something the other side simply does not understand.

Russell Broadbent (McMillan, Liberal Party) Share this | Link to this | Hansard source

The time allotted for this debate has expired. The debate is adjourned. The resumption of the debate will be made an order of the day for the next sitting.