Tony Zappia (Makin, Australian Labor Party, Shadow Parliamentary Secretary for Manufacturing) Share this | Link to this | Hansard source

The Fair Work Commission decision to cut penalty rates in the fast food, retail, hospitality, pharmacy, restaurant and clubs industries will be a kick in the guts for around 700,000 of Australia's lowest paid workers who already face increased cost of living pressures, a reduction in work hours and increased uncertainty about future work. The cuts will mean losses of up to $6,600 per year for some workers. The people affected by this decision are some of the most vulnerable and disadvantaged in the community: single parents trying to juggle family responsibilities with work; new migrants who have few work options because of language difficulties, non-recognition of qualifications and limited employment options; young people attempting to balance work and study. These are workers who have no certainty of income from week to week, work unsociable hours and do the work that most people do not want to do.

The Fair Work Commission's decision affects workers in six industry sectors, which in itself complicates the matter because each sector is unique and the current penalty rates are the result of individual negotiations and trade-offs over many years in each of those sectors. Supporters of the changes use selective extreme examples to justify their arguments. For most workers what really matters is the net take-home pay. Even with a 150 per cent or 175 per cent loading, the hourly rate of pay for many workers affected by this decision results in a lower hourly rate for Sunday work than most people earn during normal work hours. Full-time adult average weekly ordinary time earnings are currently about $1,530 a week, or $40 an hour. So many of the people affected, even with their penalty rates, receive less than the average hourly rate of pay. For example, a fast food worker currently on a 150 per cent loading is paid $29.16 an hour on a Sunday. Under the new rate where the loading has been cut from 150 per cent to 125 per cent, that same worker will be paid $24.30 per hour. That is just 60 per cent of the average hourly rate. Had the decision handed down been coupled with an increase in base pay so as to ensure that there had been no net loss in a person's income, the decision would have been seen in a different light, but that was not the case.

The decision comes at a time that wages and salaries have had their largest fall in 20 years, whilst corporate profits are at their highest in 40 years. Simultaneously, essential living costs, on which low-income earners spend all their money, have continued to rise. For example, private health insurance costs have increased by 23 per cent over the past four years, whilst in my region council rates have increased by around 15 per cent over the same period, adding hundreds of dollars of annual expense to those people.

The following is a direct quote from an email I received last week after the Fair Work decision. It reads:

In 2013 I quit being a police cadet for SAPOL as I realised teaching primary students is where my passion lies and where I am best suited.

Unfortunately going back to university full time meant I was back into retail work and working every weekend.

To do this I've sacrificed sport … social and family commitments.

Like any retail place, working weekends mean busier days and usually customers are in a rush and can be more irate.

I also live out of home and while I do get some support from Centrelink, it is my penalty rates that allow me to pay my bills each week.

Whilst I will not identify the person, I can do so if required.

I contrast the earnings of people affected by the penalty rates decision with that of the top 14 highest paid executives of Australia's publicly owned entities. For example, in the 2015-16 financial year, Ahmed Fahour of Australia Post received $5.6 million,    Bill Morrow at NBN Co received $3.6 million, and Mark Lamarre at the ASC received $2.6 million. These are all public entities. I also note, for that matter, that most Commonwealth public servant heads are also paid in excess of $800,000 per year.

Workers around Australia feel that there is one standard for the rule makers and another for everyone else. They now feel betrayed by the Fair Work Commission and by the Turnbull government. I wait with interest to see the transitional arrangements that the commission is yet to hand down, but we all know that the Prime Minister could restore the fairness now by supporting Labor's private member's bill. I remind the Prime Minister that it is not unusual for parliament to intervene when courts hand down decisions that are inconsistent with public expectations, as parliament often does.