Alex Gallacher (SA, Australian Labor Party) Share this | Hansard source

I rise to speak against the passing of the Fair Work Amendment (Supporting Australia's Jobs and Economic Recovery) Bill 2021. There was a time when the conservative side of the chamber was much more forthright and open. The Hon. Peter Reith gave a speech at the Royal Perth Yacht Club where he said: 'I know whose side I'm on. I'm on the side of business—small businesses, medium sized businesses and big businesses, and we will do what's necessary for those businesses.' I think that's what's missing in this debate. I listened to the contributions from Senator Bragg and others talking almost as if they were the workers' friends. They are far from the workers' friends.

I want to put some economic data on the record before I hop into a bit of criticism of the other side. The share of national income going to Australian workers has been steadily declining since the 1970s, with the profit share increasing. But the labour share has suddenly fallen below 50 per cent for the first time since 1959. Obviously the trend is exacerbated by the COVID-19 recession. On Thursday, the Bureau of Statistics released its June quarter gross domestic product data, and the data showed that economic activity across April, May and June shrank by seven per cent, the biggest quarterly contraction in 60 years. But the ABS noted something else. It said that company profits jumped a massive 14.9 per cent in this quarter, while the total wages and salaries bill for workers—characterised as compensation for workers—fell by a record 2.5 per cent. That meant that the labour share of income has fallen below 50 per cent for the first time in decades, while profits have hit record levels.

Why would wages and salaries decline when the government has been providing billions of dollars for JobKeeper payments? Mr Pickering, an economist at Indeed Hiring Lab and a former Reserve Bank official, told the ABC the emergency subsidies to businesses had helped:

What's basically happened is there's been a range of sectors that have reported quite a significant increase in profits, largely due to subsidies received from the government — JobKeeper.

At the same time, we've had a significant decline in employment, which is putting downward pressure on compensation of employees [wages and salaries].

However, he said, the large shift in the income share between labour and profit in the June quarter should only be temporary:

It should unwind over the coming quarters.

Saul Eslake, a very familiar name in economic circles and now a Vice-Chancellor's Fellow at the University of Tasmania, said the noticeable shift in income share in the June quarter was largely a 'statistical artefact'. He said:

It's because a whole lot of people stopped working and had their income replaced by government benefits, so profits represented a bigger share of what was left.

From one perspective, you could say JobKeeper propped up profits and in a way they did, because if it hadn't have been for JobKeeper, profits probably would have been a lot lower.

But it's basically showing that a whole lot of employees, and hence their wage payments, were removed from the equation.

Mr Eslake said there was an important phenomenon to consider when thinking about this issue. He said that we had to keep in mind what had happened to low-paid workers this year. He said that the data shows average non-farm compensation per employee actually increased by 3.3 per cent in the June quarter and by five per cent from a year earlier. That was the fastest year-on-year growth in that measurement since March 2012. Mr Eslake said:

Now, how do you explain the total wage share going down [by 2.5 per cent] and the average non-farm compensation per employee going up?

The answer is: it was disproportionately low-income and low-paid workers who've lost their jobs this year.

So, what's left tend to be higher-paid people, and even though higher-paid people have taken pay cuts themselves, the impact on that has been more than outweighed by the culling of workers at the bottom end of the scale, so the average income goes up, even when the overall income goes down.

The punchline, when we get to it, is fairly straightforward:

… over the last six years in Australia especially, and over the last 20 years in other countries, and over the last 40 years in the United States, there has been a steady shift in the distribution of income from labour to capital.

Australia was sheltered from that for a while by the mining boom, but not anymore.

If we have a predicament like that, where labour's share of national income has consistently been declining for a number of years and has now fallen below 50 per cent, disproportionately shareholders and companies are taking the lion's share of the national income. So you end up with low inflation, clearly not a bad thing, but stagnating wage growth. In an environment where people can't get a pay rise at the moment, where people can't get an increase in hours at the moment, where some of them can't get jobs at the moment, we have an omnibus bill designed to help them. Well, I think I've been around industrial relations long enough to know that the other side of the chamber has never put up a bill that's designed to help workers get a pay rise. If they were honest, they would say that. There's never been a case where that side of the chamber has put forward any sort of legislation which is designed to get people a greater share for their labour.

It just doesn't happen, and Peter Reith was honest enough to say that. That honesty is lacking on that side of the chamber now, because people are saying, 'Look, we're helping you.' They're not helping people into higher, more secure, better paid employment. They're not doing that at all. They're making it easier for employers to spread the meagre amount of money they want to spend on labour across a greater number of people. We will end up exactly like the United States, where, if you're working in a bar or restaurant and you don't get a tip, you basically can't pay your rent; you can't afford your outgoings. I don't think those on the other side of the chamber are innovative enough or smart enough to come up with a new scheme, with a new paradigm; they're basically taking an old well-trodden path in the United States, in the United Kingdom, in other parts of the world, bringing it to Australia and making Australia a poorer place for working people.

If they were honest, they would say that their job is to look after capital, 'and you lot look after labour'. But what's happened in looking after labour is they had 12 years of the Howard government, with probably another seven years of this government, which makes it extremely difficult for organised labour to actually operate. In the meantime, as Senator O'Neill alluded to, they're actually ripping off Australia. There are submissions to the wage theft inquiry which say that the amount of forgone taxation revenue from wage theft would probably be approaching a $9 billion hit to the national economy. The amount of forgone contributions tax on super is also quite a large figure. The Taxation Office is on record saying what it is. Coincidentally, the Taxation Office is in charge of collecting it. They know how much has been forgone, but they don't take any steps to collect it. If this government and the other side of the chamber had half the acumen they profess to possess, they would stick on another thousand tax collectors. I think the figures are quite simple: for every dollar you spend on a tax collector, the return to the government is $5 to $6, so another thousand people in the taxation department chasing people who are not paying superannuation and therefore not paying contributions tax would be beneficial.

If we had another group of people looking at those who systematically underpay wages, we would have more taxation revenue. We're not talking about mum and dad with two trucks or mum and dad with a small landscaping business; we're talking about huge corporations, like Woolworths owning up to $300 million worth of underpayment. How much was forgone in the taxation area? How much was forgone in the superannuation area? But, no, the coalition came up with the Fair Work Amendment (Supporting Australia's Jobs and Economic Recovery) Bill 2021, which I think basically will mean: if you haven't got a job, you can probably get one, but it's not going to be as well paid as the one you lost, and, by the way, we'll determine whether you're actually going to get overtime or not based on who's willing to work. If you're starving or you've got bills to pay and you want overtime, you won't get it, but, if someone wants to continue on ordinary pay, they will get it.

These are disgraceful things: eight-year agreements. Who's going to know what is happening in terms of the CPI and the like in eight years time? By the way, you won't get a chance to negotiate that because, if it's a $250 million investment, that will be done before you get there. By the time you get there, it will be: 'Great news! We have an eight-year agreement here.' If you ask what the wage rise is, they'll say, 'Stuff all,' or you might get CPI or half a per cent. Anyway, that'll be nothing to do with you; that will already be sorted out. How do you change it? You can't. This is a prescription for a dire situation. We should be trying to recover for people proper, full-time, secure work that's reasonably paid, not creating another underclass of people in Australia who will never see permanent employment.

There are many young people at the moment who have never had the luxury of a permanent job. They have never had it. They can get 16, 17, 22 or 25 hours but they can't get a permanent job. In other areas of quite reasonable economic activity, you have an inordinate number of casuals or labour hire people. Once again, those people don't see a permanent opportunity coming forward. But the coalition's putting up the smokescreen, in my view, that this legislation is coming along to help reinvigorate the economy. If the national labour income share continues to decline, we'll end up exactly like the United States, where you have a lot of people who, since the seventies, haven't seen their share of the wealth of their great country increase, which hasn't been good for the economy. America's deficit, you can't count the zeroes on the end of it. Australia's different. I suppose because we are different and capital is no different—capital is international—we're attracting attention. But I wish that those on the other side would at least come to the argument with clean hands.

The ACTU and other parties sat down with the Hon. Christian Porter and the Hon. Josh Frydenberg and attempted to resolve areas of concern. But, in my view, the whole lot should be just opposed absolutely. There are no redeeming features in here which will redress what is a national shame—that workers who carry this country, such as cleaners, garbagemen and all of the people who do all of those jobs we take for granted, are not getting a fair share of the national income. This bill will make sure that that never happens. It will never happen. They will be consigned to insecure work, low pay and no hope for the foreseeable future. Unless the electorate changes and votes in a different government, there will be no respite.

Actually, this is a culmination of decades of attacks on working people. We are now starting to see, in economic measuring terms, the fact that the labour share of income is dropping below 50 per cent of national income. I would prefer an economy where we were growing through productivity and economic activity, where workers were getting an increasing share of the national income, because workers spend their money. Workers do not put it in a tin and dig a hole in the garden or send it to the Cayman Islands and seek to avoid tax. There's no seeking to avoid tax if you're a wages and salary earner. You earn your money, tax goes to the appropriate place, super goes to the appropriate place and you are contributing fully to the economy. If we paid that sector correctly and gave them more freedom to bargain and the ability to increase their wages and contribute economically, they would educate their families and contribute all around in the community, and Australia would be a much better place. I don't want to see the low-wage inequality that exists in the United States.