Steve Hutchins (NSW, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak today on the pressures facing families in greater Western Sydney. These pressures centre on the convergence of three issues, all of which lie with the actions of this government. I speak about the convergence of Work Choices, rising costs of living and barriers to finding more work.

Greater Western Sydney is often discussed in terms of its parochialism, but its residents share the aspirations of all Australians in wanting to better their situation. There is, however, an underlying financial vulnerability to Western Sydney. Many of its residents are at the margins of economic stability, and the so-called hard decisions taken by this government are felt all the more in my region.

Yesterday we marked the first anniversary of the introduction of Work Choices. While the government patted itself on the back for its ideological win over the labour movement, there are very few people in the electorates celebrating. Australian workers are being put onto AWAs at a rate of 1,000 a day. While existing employees cannot be forced on to them, new employees may be made to sign an AWA as a condition of their employment—in other words, take it or leave it.

The fact is that those AWAs are taking away conditions that are supposed to be legally protected. The Office of the Employment Advocate’s own figures, released last year in the course of Senate estimates, showed that 100 per cent of the AWAs lodged with the Office of the Employment Advocate up to that point—and bearing in mind that was only two to three months after the introduction of Work Choices—had removed at least one of the protected award conditions. More than half removed overtime payments, two-thirds cut penalty payments, two-thirds cut annual leave loading, half cut shift loadings, one-third cut declared public holidays and 40 per cent cut rest breaks.

Not surprisingly, the government is refusing to release any more data. The inference one can draw from that is that the coalition is embarrassed by the effects of its own IR laws on workers. Another inference one can make is that the government knows exactly what kind of impact Work Choices is having on families but will not change it to relieve the pressures they face.

Further evidence of the impact of the laws emerged this week with a very thorough report from Griffith University’s Professor David Peetz, commissioned by Industrial Relations Victoria. Professor Peetz’s report showed that wages and conditions have gone backwards in the space of 12 months and that particular sectors of the workforce have been made even more vulnerable by the changes to the industrial relations system. He found that non-managerial workers on AWAs are earning nine per cent less than employees working under registered collective agreements but that, despite this, they are actually working an additional 4.1 hours per week. This means that, averaged out, their hourly earnings are 3.3 per cent less than those of equivalent workers on collective agreements.

The last census in 2001 showed that just over 80 per cent of people in the federal electorate of Lindsay were earning less than $52,000 a year, which would indicate that many of them fall into the non-managerial category that Professor Peetz referred to. Women and casuals in low-wage industries are the hardest hit. Professor Peetz found that female full-time workers were earning 8.5 per cent less on AWAs than if they were covered by a collective agreement and that female casual workers earned seven per cent less than the award rate on AWAs.

Historically, women have been paid less because they are overrepresented in low-wage industries, but the abolition of the no-disadvantage test has seen this gap widen to the point where they are earning less than the minimum wages set out in the relevant awards. In my duty electorate of Lindsay, according to the last census in 2001, 20 per cent of women were employed in the retail trade. These are the workers in the firing line of Work Choices because they have the least bargaining power.

We are only seeing the beginning. No-one in the labour movement said that the sky would fall in; what we warned about was the steady unravelling of 100 years of rights and protections for workers. As more employees come off collective agreements and are moved on to AWAs, we will see the work/life balance made harder and harder to manage and wages take a downturn. Not only do they have to contend with a fall in their wages and conditions; workers also have to contend with the possibility of being sacked for any reason and have no unfair dismissal protection if they work in a company with fewer than 100 employees. In Lindsay, that is 99 per cent of businesses.

Employees in my electorates have no more job security. They are losing their jobs but they are unable to do anything about it. I noted Senator Humphries last night in his adjournment speech arguing that we have not heard of these cases publicly, therefore, according to him, they do not exist. I can assure Senator Humphries and any of his doubting colleagues that these cases do exist, because they come to my office—and I am certain to the offices of my colleagues—on a weekly basis. They are afraid to go public because they are concerned about how this will affect their job prospects in the future. They do not want to be seen as troublemakers, but they do want justice if they are unfairly dismissed. The system the government has put in place delivers no justice and no chance of reinstatement.

In the last month I have been approached by a mechanic whose state award had been overridden by Work Choices, allowing his employer to reduce his workforce numbers to fewer than 15 before winding up the company and avoiding a redundancy payout. I have also been approached by a young chef who, after a period of hospitalisation for a serious infection, was sacked upon return to work. He was never paid holiday pay and never paid overtime. I have no doubt these cases will continue to surface and the undercurrent of discontent will continue to flow, whether the coalition recognises this or not.

The second of the three pressures facing Western Sydney is the rising cost of living, of which I would name housing costs and interest rates as the largest component. Families in Western Sydney are among the most vulnerable to upward movements of interest rates. They are the most likely to have borrowed at the peak of the real estate boom in 2003 and to have high debt-to-asset and debt-to-income ratios. The Reserve Bank of Australia has specifically identified Western Sydney as a region most at risk if interest rates go up. In its March 2007 Financial Stability Review, released last week, the RBA noted that, on average, loan defaults and mortgagee sales have increased in Western Sydney—and little wonder. Eight consecutive interest rate rises have pushed these families to the wall. These families listened to the Prime Minister’s promise during the 2004 election that interest rates would not rise and then watched as they were hit by four increases in the space of two years. The result of those increases is Australian families are paying a record high proportion of their disposable incomes to interest repayments. The figure is currently hovering at around 11 per cent for all interest repayments, and just over nine per cent for housing loan interest repayments. These figures are almost double what they were in 1996, when this government came to power.

There is no such thing as a small mortgage these days and there is no such thing as a small interest rate rise. I have spoken with constituents who are hovering at the fringe, wondering whether they will be able to make mortgage repayments each month. I have had families approach me and tell me of how they are having to sell their homes because they simply cannot afford them. They are crossing their fingers that they will get at least the same price they paid in 2003—an increasingly difficult proposition for many.

Whomever I speak to about this issue in Western Sydney, though, the resounding concern is over another interest rate rise. Last November, when they were foisted with the eighth straight rise, many households drew a line in the sand. They know that, if they were forced to absorb another interest rate rise, even of a quarter of a percentage point, they will have crossed that line.

Nigel Scullion (NT, Country Liberal Party, Minister for Community Services) Share this | Link to this | Hansard source

17 per cent!

Steve Hutchins (NSW, Australian Labor Party) Share this | Link to this | Hansard source

I do not know whether you listened to me about their debt ratio. People in the mortgage belt have tightened their budgets almost as far as they can go. They have cut out extra trips in the car to save on the petrol bills, they have given up indulgences at the supermarket, they have even forgone some of their children’s sporting activities just to make certain they have a roof over their heads. When you have trimmed all the fat you can, what else remains to trim but the costs of a family home?

Already we have seen a 400 per cent increase in mortgagee sales in Penrith over the last year. Court applications for property repossessions in New South Wales have increased 60 per cent in the last two years—I hope my coalition colleagues heard that. As of the end of last year, 2,778 bankruptcies had been registered in New South Wales. This trend will continue as long as the government fails to rein in inflationary pressures and reduce the upward pressure on rates. If interest rates rise again under this government, we will see more and more people turn to charities for assistance, charities which are helping a greater proportion of people traditionally classified as ‘middle-class’. Families will be driven to the wall and they will not forget the role played by this government.

With all of the price pressures facing many families in Western Sydney, residents are understandably looking to bolster their earnings potential. Notwithstanding the barriers to gaining more work put up by Work Choices, Western Sydney families are also seeing their efforts frustrated by a lack of support in the system. I speak particularly about child care. Child care in Australia, with no national planning approach, has been allowed to degenerate into a shambles whereby either there is not enough of it or it is prohibitively expensive.

Yesterday’s ‘Persons not in the labour force’ survey, released by the ABS, states that almost 100,000 were not in the workforce because of the poor state of the childcare system. Nationwide 58,200 people cited cost as the No. 1 issue. The cost of child care, particularly for the zero- to two-year-old sector, has blown out to such an extent that it is discouraging women from returning to work after the birth of their children. The out-of-pocket expenses for families using child care are at record levels. Analysis of CPI figures shows that over the past 10 years, out-of-pocket childcare expenses have doubled nationwide and soared 88 per cent in Sydney. Increases in the cost of child care have outstripped price hikes for fresh fruit, petrol and holidays. Over the past year alone, out-of-pocket childcare expenses, which are the costs after parents have received the childcare benefit and rebate, have risen a further 12 per cent.

The federal government has abandoned child care to the free market and walked away from its responsibility to make the system accessible and affordable. Care for three- to five-year-olds is more profitable and less costly for operators, so the important zero- to two-year-old age bracket, which is more resource intensive, is falling by the wayside. This has been a problem for many years. This inaction by the government means that a significant share of the potential workforce is being denied the opportunity to work. The government is saying to families they have the choice between working and raising children, but they cannot have both.

The three issues I have outlined today—Work Choices, interest rates and child care—are placing significant pressures on families in Western Sydney. They are trying to get ahead and share in the economic prosperity, but the policies of the coalition are stymieing their efforts. We need a government that understands the pressures they face and a government that is willing to make changes to restore balance and fairness. After 11 years, the coalition has only demonstrated its lack of determination. Only a Labor government will give people that chance.