Lisa Chesters (Bendigo, Australian Labor Party) Share this | Link to this | Hansard source

I move:

That this House:

(1)    notes that:

     (a) penalty rates:

        (i) continue to be a fundamental part of a strong safety net for Australian workers, enabling those in low income and highly casualised industries to share in the nation’s economic prosperity; and

        (ii) are not a luxury—they pay the bills and put food on the table for up to 4.5 million Australians relying on them; and

     (b) reducing the penalty rates of low-paid workers will negatively impact the economy as a whole;

(2)   acknowledges that:

     (a) hospitality workers are in the bottom 30 per cent of Australian income earners;

     (b) along with hospitality and food services, retail has the largest proportion of low paid workers in Australia; and

     (c) women comprise a disproportionate share of workers in both the retail and hospitality sectors, accounting for 55 per cent of all employed;

(3)   condemns the Government’s failure to protect penalty rates, particularly given continued record low wage growth; and

(4)   calls on the Government to protect penalty rates by joining with the Opposition in making a submission to the Fair Work Commission, arguing strongly that penalty rates should not be cut.

If penalty rates are cut, it is entirely the fault of this government. This government, in the last term and this term, have failed. They have failed to stand up for working people and they have failed to protect penalty rates for some of the most vulnerable people in our community.

I note the members opposite have already started to giggle and laugh. The 4.5 million Australians who rely on penalty rates are not laughing. They are not laughing that this government have failed to join the Labor opposition and make a submission to the Fair Work review into penalty rates, arguing strongly that they should not be cut. These 4.5 million Australians who rely on penalty rates are low-paid workers, the majority of whom are women. Particularly under the gun and targeted at the moment are hospitality and retail workers. Hospitality workers are at the bottom 30 per cent of Australian income earners. Hospitality and retail workers have the largest proportion of low-paid workers in Australia, and 55 per cent of these workers are women. Why on earth would the government not stand with these hardworking Australians?

I will put it into context for government members about what it means for somebody earning penalty rates. Last year I had the great privilege of meeting many of these workers and learning firsthand about their experiences and about what they actually spend their wages on. These people said that earning penalty rates is how they pay their rent. It is how they pay their rates notice. It is how they pay for their children's basketball or ballet lessons. These are not luxuries; these are the realities of life.

A critical point that government ministers and government members have forgotten is that people on penalty rates are quite often our low-paid workers. So, when you cut their penalty rates, you cut their take-home pay—and the reality is that this is what is being proposed. Why the government is to blame is because, during the last term, we had several backbenchers standing up advocating a cut in penalty rates. The former Prime Minister and the current Prime Minister declared that the weekend was dead and advocated a cut in penalty rates, ignoring the research, ignoring what is being suggested and ignoring the voices of ordinary workers who are saying, 'If you cut my penalty rates, I'll slide into poverty.'

There is no economic analysis that proves that cutting penalty rates will in fact increase jobs. This is just some rhetoric that the government like to throw out there. It will not increase jobs. For the few businesses that may open on a Sunday, if penalty rates are cut, it may create some extra work for one person on a Sunday—but it does not create jobs. Anyone who suggests that is either kidding themselves or misleading their own constituencies and this parliament. Cutting penalty rates will not increase jobs, and there is no study that has proven that to be otherwise.

A research report from the McKell Institute demonstrated that, if you cut penalty rates, you take money out of the local economy, in areas like my own electorate of Bendigo. This research said that millions of dollars would be cut from local economies. As one small business owner—who does open seven days a week—said to me:

If you cut penalty rates then people won't come into my store. The very people that I serve in my restaurant are the very people who also earn penalty rates. So therefore they have the disposable income to come into my restaurant.

The government are narrow sighted and are only listening to one side of the debate. In the last parliament and in this parliament we have seen time and time again the government ignoring the voices of workers and listening to their mates in big business. They are not listening to the people who will be most affected by a cut in penalty rates.

Again we call on the government to do all they can to protect penalty rates. Again we call on the government to join the opposition and make a submission to the Fair Work Commission and argue strongly for protecting penalty rates and arguing strongly that penalty rates not be cut. The Fair Work Commission have again put off releasing their report, calling for more submissions to be made. So, clearly, they are not convinced by the government's rhetoric that cutting penalty rates will be good for workers. The government need to drop their case against the lowest paid workers, support our lowest paid workers and defend their penalty rates.

Kevin Hogan (Page, National Party) Share this | Link to this | Hansard source

Is the motion seconded?

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

I second the motion and reserve my right to speak.

Luke Howarth (Petrie, Liberal Party) Share this | Link to this | Hansard source

I rise today to talk about this motion on penalty rates with great pleasure. We just heard the member for Bendigo, who raised this motion, talk on this issue. I believe that the member for Bendigo has absolutely no credibility on this issue whatsoever.

In her maiden speech I heard the member for Bendigo get up and say:

I believe that it is the role of government to reduce the number of employees who are being forced to become contractors instead of working for a boss.

This is what the member for Bendigo said in her first speech to parliament. Well, member for Bendigo, that is not the role of government. It is not your role to tell employees, or those people on Newstart, how they should be employed and under what conditions. It just goes to show that this member, who is now the shadow assistant minister for workplace relations, is totally out of her depth, and she should resign from that position. If the Labor Party came back into government one day, God help us if she is appointed as the workplace relations minister because she does not have a clue as to what is going on—and that is evident from her maiden speech.

We in the coalition have said right from the beginning that it is not up to us individual members, like the member for Bendigo, the member for Petrie or anyone else here, to decide on penalty rates. It is actually up to the Fair Work Commission. Of course we know that when Bill Shorten was the Minister for Workplace Relations he put that into law. As the minister, Bill Shorten established the 2012 review of the Fair Work Act which considered penalty rates and even recommended that arrangements for penalty rates on certain public holidays be reformed. They changed they way penalty rates were set. Bill Shorten as minister amended the Fair Work Act to require the Fair Work Commission to specifically review penalty rates. The member opposite says that we need to be making submissions or that we have not made a submission and that we need to join their submission. Quite frankly, it is not up to government to bully the Fair Work Commission into your way of thinking. You are saying that we had a particular issue, or that employers are bullying people; you are actually bullying the Fair Work Commission and you cannot open your mind to look at where some of these issues need to change.

If you particularly want to stand up for workers rights then you need to look at some of the unions, perhaps, that are bartering away penalty rates. And what for? For their own benefit—to line their own pockets. You need not look any further, member for Bendigo, than your own leader, Bill Shorten, when he was head of the AWU. We all know what he did with Cleanevent and for cleaners. If you want to talk about how you can stick up for cleaners in your electorate, then think about what Mr Shorten, Leader of the Opposition, did when he was with the AWU. He said, 'Sure. Don't worry, Cleanevent. You don't have to pay penalty rates. You don't have to pay any penalty rates. Just slip us a lazy 25k a year into the Australian Workers' Union, and we'll turn a blind eye.' You have the audacity to come in here and say the government is responsible! If you got into government and if you had your way, employment would go right through the roof.

Ms Chesters interjecting—

Unemployment! Unemployment would go through the roof—sorry. You got me there, member for Bendigo. I hope employment does go through the roof because that is what we are here for. As the member for Petrie, the member for Bendigo, the member for Lily and everyone else in this chamber, we want to create an environment in which business can employ, not create an environment where you tell workers how they should be employed.

There are specific examples—I will give you one right now if you are listening, member for Bendigo and member for Lilley. When I was growing up, young people would often work on a Thursday night and a Saturday morning. They would be in year 10, 11 and 12. They would often do a part-time job. Now, of course, we have supermarkets open Monday to Friday. But I know examples where young people in year 11 would work on a Saturday. They would start on a Saturday and do eight hours work, and they would get paid. But what happened when the Fair Work Commission came in at some point? Now, even without doing any hours during the week, on a Saturday they start on time and a quarter from the very first hour—nine o'clock, eight o'clock in the morning. Then it goes to time and a half; then after 12.30 it goes to double time. So a student that was getting an eight-hour shift on a Saturday is now only getting a four-hour shift because a small business closes after four hours. The small businesses that you spoke about in your maiden speech, member for Bendigo, with your parents and so forth, where you had to work on a Saturday, you would not be able to employ a student if you were paying them double time on a Saturday.

I will say straight up: we believe in penalty rates, I believe that on a Sunday you should be paid penalty rates, I believe that on 38 hours or more a week you should be paid penalty rates. But we are here to provide jobs and growth. You need to open your eyes and learn a bit. (Time expired)

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

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

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

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

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

Bert Van Manen (Forde, Liberal Party) Share this | Link to this | Hansard source

It has been interesting to sit here and listen to the contributions from the member for Bendigo and the member for Lilley to this debate on the motion moved by the member for Bendigo. It is a pity that they have not stayed to listen, because they might learn a little bit.

The member for Bendigo said that the government had to put a case to the Fair Work Commission. The fact is, the government does not need to put a case to the Fair Work Commission, because it is the job of it fair work commissioned to make decisions on penalty rates. Who it was who gave the Fair Work Commission the responsibility to make decisions in relation to penalty rates. It was the Leader of the Opposition when he was in government as the minister for employment relations who did that. So all the froth and bubble we have just heard from the room member for Bendigo the member for Lilley is complete and utter hypocrisy. Whatever those opposite have to say on the matter of penalty rates is complete and utter hypocrisy.

We have just heard the member for Lilley say what a great deal it is for members of unions to have their penalty rates wrapped up in a higher base rate of pay. Let us reflect on that for a minute in relation to the employees of Coles and their EBA. The member for Petrie mentioned Cleanevent, but I will mention a more recent one, Coles. The Fair Work Commission, as a result of an action brought by a Coles employee, whose union, the Shop, Distributive and Allied Employees' Association, opposed his motion to contest the EBA and supported Coles position, found that the 2015 Coles EBA failed the better-off-overall test that the member for Lilley was just waxing lyrical about, but he could not be bothered to stay here and listen to the reality of what is going on.

What is the cost of that to the 43,000 retail employees that the member for Bendigo and the member for Lilley said we should be looking after? We should be looking after them and we should be making sure that they get paid their appropriate rate of pay, but it was their union, the SDA, and the Australian Workers Union with Cleanevent, who let down their members—in this case some 43,000 employees of Coles. The cost to those employees is estimated at somewhere between $70 million and $100 million a year. Do I hear those opposite say to the SDA and Coles that they should ensure that those employees get paid what the Fair Work Commission rightly found they should have been paid? No. There has been not a peep, not a whisper, out of them. A church mouse would make more noise on this issue than have those opposite.

The problem is that not only has this given Coles and unfair competitive advantage against people like Aldi, IGA and others, who do pay the proper minimum wage and the proper penalty rates. We have just listened to complete hogwash from the member for Bendigo and the member for Lilley. This is all because of a law passed by the Leader of the Opposition when he was last in government. He and his team can wax lyrical all they like about protecting workers rights and penalty rights, but as usual we need to look not at what the Labor Party says but at what the Labor Party does. What the Labor Party has done is let down the members of the unions—the employees of the big employers—whom they purport to protect, because that is the reality of what has happened.

We have not heard a peep out of them about this. Why is that? That is a very good question. I have not heard any response anywhere from the Leader of the Opposition, the shadow minister for employment workplace relations or the shadow assistant minister for workplace relations. Why do they not hold to account this union and the big employers to make sure that these hardworking retail employees are paid what they are due to be paid. (Time expired)

Maria Vamvakinou (Calwell, Australian Labor Party) Share this | Link to this | Hansard source

I am very pleased to rise today to support the motion moved by the member for Bendigo regarding penalty rates. Penalty rates are extremely important to the people and families in my electorate of Calwell. These are low-income workers who sacrifice family time and work unsociable hours because they rely on penalty rates to pay for their everyday living expenses, in most cases including their mortgages or their rent. There are 4.5 million Australians, most in lower paid jobs, who rely on penalty rates to pay their bills and to make ends meet. Therefore, I am pleased to stand alongside my colleague the member for Bendigo, who is a very strong campaigner on this issue.

Penalty rates are a safety net for Australian workers in an environment that is becoming more precarious, casualised and underemployed. Penalty rates are essential in combatting the emergence of a class of working poor, and proposing to remove them is an assault on Australian workers. Removing penalty rates will disproportionality affect hospitality and retail workers, who are amongst the lowest paid workers in Australia and the largest employers of women in the labour force. Removing that safety net for women to engage in the workforce risks also removing their autonomy and capacity for self-determination. Many of those women live in my electorate.

Incentivising irregular hours of work, and compensation for working during usual family and recreation time, is not a new phenomenon. Penalty rates were hard fought for by early industrial Australians. They now form an important tenet of our social democracy and are the cornerstone of fairness, social inclusion and living standards in this country, whilst preventing discrimination and exploitation.

Last week was a very big week for my electorate, with the closing of the Ford motor car factory. I look back at the 57-year history of Ford in Broadmeadows and the multiple generations of workers who have lived in the federal seat of Calwell. These were people who worked very long hours, risked their health and spent time away from their families to better their quality of life, and this sacrifice was rewarded with penalty rates. It was their penalty rates that they saved and used to buy a house and to educate their children. Penalty rates are a key feature of nation building in this country.

The difference that penalty rates make to the average worker's ability to make ends meet cannot be underestimated or undervalued. We are living in a time where wage growth is slow compared to the increased costs of housing and health care, for example. The ABS wage price index shows that wage growth is the slowest it has been in the last 20 years. We are seeing everyday Australians dip into their savings or put less aside in order to cope with the increase in the cost of living.

Penalty rates enable security and upward momentum through sharing in the nation's prosperity, by allowing low-income earners to be properly compensated for sacrificing their family life and their social life. They add to low-income workers' take home pay each week, adding to their and their family's quality of life as well as the competitiveness of the national economy.

The removal of penalty rates will impact on those most vulnerable in the labour market: low-income earners—people who live in my electorate. Many of my constituents in Calwell come from new and emerging communities, who want to make a go of their life in Australia. Employment and fair pay is key to making a go of it. I want to quote one of my constituents, who I have spoken to, who feels very strongly about this issue. Humphrey Caspersz is from Craigieburn in Melbourne's north. He is a field service technician for electronic appliances. Humphrey wants me to read this out to the chamber:

To me, after hours, overtime and minimum hours for weekend work are the most important and crucial payments I receive. It helps with my mortgage and helps provide the food I put on the table to feed my growing family as I have a wife and three children, with another on the way. I have been both on a salary and wage and found the salary meant that I was working long hours with no bonuses and hardly got to see my family, with no extra benefit but to the company I worked for. Now I am back on a wage with all the penalties, giving me the option to work weekends and after hours with the incentive of more pay and allowing me to have some extra money that I can spend on my family and also helping make ends meet—for example, paying our ever increasing energy bills. I believe these penalties are a great reward for the sacrifice of giving up my time that could be better spent with my family.

Alex Hawke (Mitchell, Liberal Party, Assistant Minister for Immigration and Border Protection) Share this | Link to this | Hansard source

The member for Lilley was right when he said that this debate is emblematic of many of the differences between the ALP and the Liberal Party in today's political environment. But he is right not for the reason that he suggested; he, of course, is pointing to the fact that the Labor Party of today is wholly captive to the Australian union movement and ignorant of the realities of the modern workplace and the realities of big business versus small business in this country.

This debate is actually about small business versus big business. What we see in today's world is that the representatives of the union movement and the union movement in this country are like the multinational corporations that operate in the private sector. Unions are big businesses today in the industrial relations space. Just like multinationals, the big businesses—the union movement—trade away the conditions under awards for their workers, with the full cognisance and agreement of the Australian Labor Party and the former union heads, at the expense of small business.

This debate today is about ensuring that we have a fair industrial umpire who is able to consider arguments from those who are unable to form unions—that is, every single worker in a small or medium business, which are most of the employers and most of the employment in this country. They are unable to join a union, and those who do not join a union, do not have their case represented at Fair Work Australia. Instead, what we see are unions representing cases at Fair Work Australia that they do not take to their workers themselves.

If any one of these members—the member for Bendigo, the member for Lilley or the member who just spoke—went out and examined the actual state of awards at the moment in this country, they would find things like this. They would find that a McDonald's has to pay a lower rate of penalty rate than a café, a small business, that exists across the road. That is what they would find in many different awards, depending on what award has to be paid for a penalty rate. They will find that a small business has to pay its workers more than a multinational corporation. Who over there wants to stand up and defend that? Who wants to stand up and defend them?

Where in this motion that the member for Bendigo moved today does it say 'a condemnation of the SDA'? Where is the condemnation of the SDA who traded away penalty rates in South Australia, was found to be unfair and did not pass the test that was required? The SDA operated just like a multinational and traded away the penalty rates of workers in South Australia in the retail sector. That is what they felt was fair. They were able, because of their size, their scale and their member base, to negotiate with the large retailers at the expense of small retailers. So it was the small retailers who suffered the most in South Australia. The union movement, of course, does not care and does not get the point.

In every argument that we hear from the Labor Party today, they are trying to say that this is about creating a class of working poor. In one sense, they are right. The new class of working poor in this country are the small businessman and businesswoman in this country running their own small business, who working longer and longer hours to pay their taxes in this country, so that they can put more people on in their small business. They are working longer and longer hours at their own expense, at their families' expense and at their time's expense, so that they can operate their small family business, because of the regulatory burdens that successive Labor governments put on them and because of the onerous industrial relations requirements that are on them. The small businesses that provide most of the employment in this country are the new class of working poor. If the Labor Party was referring to them here, we would accept it.

Here we are in this debate again post the election talking about the same things. It is the unions. The only people cutting deals in this country to reduce penalty rates are the union movement. The only people in this country doing deals to reduce penalty rates are the union movement. So when we have cases put to Fair Work Australia and finally hear an independent umpire set up by the Labor Party to arbitrate the case for small business and employees about what rates of pay and penalty rates would be fair on Saturdays and Sundays—they are cases arbitrated by the independent umpire, which was set up and put in place by the Leader of the Opposition—we see that Labor will not accept the independent umpire's decision, which is really to the benefit of small business, predominantly.

It is the big unions cutting deals with big multinationals that are reducing penalty rates in this country. Yet small businesses are supposed to now suffer because the Labor Party will not accept in any way, no matter what they rule, the independent arbitration of Fair Work Australia—the saviour of the modern industrial relations system set up by the Leader of the Opposition and by the Labor Party. They will not accept the outcome of the independent umpire.

We know what is going on here with these kinds of motions. It shows that Labor simply does not get the modern economy. They have no interest in a fair and equitable association between employee and employer. They are wholly captive to the modern union movement and they are unable to deshackle themselves from the unions and be independent. (Time expired)

Lucy Wicks (Robertson, Liberal Party) Share this | Link to this | Hansard source

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