Gavin Marshall (Victoria, Deputy-President) Share this | Link to this | Hansard source

The President has received the following letter from Senator Moore:

Pursuant to standing order 75, I propose that the following matter of public importance be submitted to the Senate for discussion:

"The Turnbull Liberal Government's attack on penalty rates."

Is the proposal supported?

More than the number of senators required by the standing orders having risen in their places—

The proposal is supported. I understand that mutual arrangements have been made to allocate specific times to each of the speakers in today's debate. With the concurrence of the Senate, I shall ask the clerks to set the clock accordingly.

Joe Ludwig (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak on this matter of public importance. It is important to let Australian people know that the Turnbull Liberal government, or coalition—although I think he has cut them out—wants to cut and ultimately abolish penalty rates. This is the latest guise of the Liberals' unrelenting attack on workers' pay and conditions. They could not get away with the wholesale attack on penalty rates and conditions which they called Work Choices, so they have narrowed it down to having an argument over penalty rates, for now.

This is, I think, the first step in their systematic attempt at weakening protections and conditions for workers in this country, and you can hear that in the words they speak, in what the Liberals have said. On 3AW just last week, Mr Turnbull said:

… I think over time you will see a move to a more flexible workplace, the transition to that …

Host Neil Mitchell interjected:

… it's a 7-day economy isn't it?

Mr Turnbull agreed:

Of course it is …

The Treasurer, Mr Morrison, said:

… we need the flexibility in our system to ensure we have this agile and innovative economy.

The new Minister for Resources, Energy and Northern Australia, Mr Frydenberg, said:

Malcolm Turnbull is absolutely right to point to industrial relations as one area where it does cost business and ultimately it does cost jobs.

When he was asked if the government needed to look at cutting penalty rates, he continued:

… this an area we need to look at because if it means more jobs and changing there, that … could be good for the economy.

This is a softening-up by the government. They are softening us up using the guise of flexibility, using the guise of, 'Let's have innovation,' to attack penalty rates and conditions. They failed with Work Choices to convince people, and they will fail again.

As you can tell from these quotes, the coalition are—I will grant them that—more nuanced after the Work Choices fiasco, but it remains the same song. It is an attempt to cut people's wages and conditions, but they remain as determined as ever. Australians should also notice the use of the word 'flexibility'. As I have said, at the top of the coalition government's vocabulary at the moment is 'flexibility'. They use it to try to convince us that flexibility is what is lacking—that, if only you were taking less money home for working on weekends, this would create a jobs bonanza suddenly. Well, it will not. It will not change a thing other than driving wages down. Under Mr Turnbull and the Liberals, 'flexibility' simply means cuts—cuts to youth wages, cuts to penalty rates and cuts to conditions of employment. People's earning less money does not create more jobs; it takes money out of the economy. The attack on penalty rates is just another mutation of the Liberals' extreme industrial relations agenda of completely getting rid of penalty rates for workers.

People depend on penalty rates. If you look at wages growth, it has flatlined and is at about a 20-year low. Unemployment is up to 6.2 per cent, and recently research has shown that, if the incentives provided by penalty rates were removed, people simply would not work the unsociable hours that some of these jobs require. Business confidence is down and consumer confidence is down, not because of penalty rates, not because of the payment to workers but because the Turnbull Liberal government's policies are driving down our economy. We should be encouraging people to get into the labour market, not putting up roadblocks. This is simply an attack on the lowest-paid workers in this country.

The extra money people earn for working on the weekends or on public holidays, which they give up instead of spending time with their families, pays for that after-school sport, pays for the dinner out with the family, pays for going to see a movie and pays for unexpected bills or for child care. The point is that weekends are not the same as weekdays. While it has become more common for many young people especially to work over weekends, that does not mean these hours have become any less unsociable. If it was true that weekends were the same as weekdays then Western Australia would change its trading hours and would allow shops to open on Saturdays and Sundays but the Liberal government over there has remained pretty steadfastly opposed to that for a long time, as you know. While some of these people are working, they miss family birthdays, important occasions, and leisure time with their partners and children. It is completely fair that if you are going to give up this time on the weekend then a penalty rate should be paid for that time. The Liberals simply do not understand the everyday reality of Australian workers and their families.

I think the Liberals live in an ivory tower. They live in this da-da land where they think that people should be paid less, that the economy will boom and that ultimately business will prosper. It is completely untrue. It is an equation that simply does not add up. Cutting the disposable income of Australian workers does not improve our economy, it does not grow the pie and it does not bring about more jobs. We only have to look at the United States to see the driving down of wages, with a minimum wage of $7.25, has not created prosperity; it has in fact created an enormous gap in equality. Using the example of workers in the United States, it is important to note one of them, Mr Gassan, never made it to his son's graduation in the US because he was a manager at Dunkin' Donuts. Gassan was working overtime at Dunkin' Donuts the day his son became a high school graduate. It is about making workers work for seven days, about not giving them opportunity and about driving them into the dirt. This is where the coalition want to go. They do not want to recognise that people should be paid fairly.

Recently President Obama announced that he will be raising the overtime salary threshold from $23,000 to $50,000 because even the United States recognise driving down overtime and penalty rates does not encourage growth in the economy. President Obama said:

If you work longer, you work harder, you should get paid for it.

That is what Labor believes and that is why we will continue to fight for it.

The Turnbull Liberal government is determined to pursue the same old path of unfairness—cruel cuts and attacks on workers which have become a hallmark of the conservative movement—but Labor will not support this attack, the erosion of workers' conditions or, in particular, cuts to penalty rates. You only have to go to that example I gave in the United States where Mr Gassan, a salaried employee not being paid overtime who regularly works 75 hours a week without receiving a dime in overtime payment. His employer would call on him to cover shifts and work extra hours and, unlike the employees on an hourly rate, did not have to pay him overtime because he was a salaried employee. This is where the Liberals want to run.

But what was Mr Gassan's salary? It was $23,600 a year, below which all workers are eligible for overtime. And because he was a manager, his employer classified him as an executive and thus exempted him from overtime payment. He missed his kids' activities, their parent-teacher conferences and their sports games. I think the call on the other side is: let's go there; let's adopt that path, not grow the economy, not improve wages and conditions, not ensure there is true flexibility in the labour market but let's drive it down to give the bosses the flexibility they demand.

Cutting penalty rates does not create more jobs, it does not grow a bigger pie but what it does do is simply put the whip in the boss's hand. What we have in Australia is a well regulated system, a system that provides fairness to those who are employed in it and fairness to those employers who also want to work within it. You only have to look at the example of 7-Eleven— (Time expired)

Christopher Back (WA, Liberal Party) Share this | Link to this | Hansard source

A prime example of the 87-87 rule is being played out this afternoon. Eighty-seven per cent of private sector workers are not in unions and 87 per cent of Labor members and Senators are. But before you go, Senator Ludwig, do not worry too much about Mr Gassan; I remember Dr Back actually working at the races on Boxing Day without getting penalties on the day that his son was born, having dropped his wife off to King Edward Hospital on the way.

What we have here is simply a circumstance of scare mongering. The only risk to penalty rates in this country to my awareness is the current Leader of the Opposition, Mr Shorten, and I will come to that in a few minutes time. There is no suggestion about penalty rates being dealt with by the coalition because, as we all know and as Senator Ludwig himself well knows, they are set by the Fair Work Commission, not by the government of the day.

If I can draw attention then to some of the comments by the Labor opposition on penalty rates only this year, the shadow minister for employment, Mr O'Connor, had an interview with the ABC where he said:

There are particular provisions in each award or agreement that I think should be reviewed and I'm not suggesting for a moment that there aren't provisions, including penalty rates, that shouldn't be looked at….

The shadow Assistant Treasurer, Mr Leigh, in January made the comment to an ABC journalist:

I am always up for an evidence based discussion.

But if Senator Ludwig wants to draw attention to the abolition of penalty rates, he need go no further than Mr Shorten, his leader in the other place. As national secretary of the AWU, Mr Shorten led the union into an agreement with Clean Event, which—listen to this—removed all penalty rates for low-paid cleaners with—and Senator Nash will be interested in this—no compensation. Clean Event paid the AWU—as of course was played out in the royal commission; the one we were told was unnecessary this morning—$25,000 a year and provided lists of all of the employees so that the union could add it to their membership. So, if people want to talk about the possibility of penalty rates being abolished, go no further than Mr Shorten himself.

What might have been his motives for doing that? Well, he might have been seeking more job security for those low-paid workers. He might be hoping that they might get more hours of employment. He might also have been thinking about the financial health of the union—and indeed his own advancement into a political career, where we see him today.

This week Dr John Falzon, the CEO of St Vincent de Paul, will present an oration in Anti-Poverty Week. The title he has chosen is 'Sick with worry'. The St Vincent de Paul report finds that people's desire to participate in employment shines through. That is very much the basis of the coalition government's thrust in examining the level of penalty rates. It is Mr Shorten who destroys penalty rates for low-paid workers. What the coalition is about is looking at penalty rates themselves, particularly Sundays and public holidays.

In big business we have a circumstance in which many employees are employed under enterprise bargaining agreements. We have the individual flexibility agreements, brought in by the previous Labor government and now being vehemently opposed. So in larger businesses there are always opportunities for negotiation for full-time workers. What we are talking about here of course is the people who do not work full-time during the week: students who can only work of a weekend; stay-at-home parents who can only get the opportunity to have their children, for example, looked after on a weekend; or indeed casual employees who may want weekend work. These are very much the people about whom we are speaking.

I can talk about the opportunities for employment of youth in the hospitality industry in all of Australia's states, but I will focus on Western Australia where—as Senator Ludwig does not seem to understand—we actually do work on Saturdays and Sundays. The hospitality industry—restaurants and catering—is telling us that they can immediately create between 40,000 and 55,000 new jobs across Australia if we can get some level of sensibility around penalty rates—time and a half on Saturdays, going through to time and a half on Sundays and public holidays; not the extra 75 per cent on Sundays or the extra 150 per cent on the Monday of public holidays.

As I have said so often in this place: why is it that on the Monday morning of Anzac Day following the dawn service, you cannot get a coffee? It is not because all the owners of the coffee shops are down at Margaret River; it is because they cannot pay their casual employees $42 an hour to wash dishes. Domino's cannot pay a kid $42 an hour to deliver pizzas. It simply is not possible. But restaurants and cafes in this country employ 200,000 Australians—they are the largest employer in the tourism industry—and the sector has said that they can improve 43 per cent in the 15 to 24 age group, and 16 per cent across all sectors. That is the level of increase in employment that is possible.

Restaurant and Catering Australia indicate that in that industry an extra 51,000 jobs and an extra 64,500 additional hours of work could be generated through weekend pay reform. This is the result of a recent survey in that industry: 54 per cent of businesses which were surveyed which are now closed on Sundays and public holidays would open if there was a rationalisation of penalty rates; 52 per cent of businesses would take on more staff, particularly in rural, remote and regional areas.

Let's look at the hospitality, catering and tourism industries. One million Chinese are now coming into our country. What is the single complaint that is coming back through the tourism sector? It is lack of services and lack of facilities being open on weekends. If we are going to enjoy the benefits of tourism, and the inbound tourism trade particularly, we have simply got to rationalise these circumstances.

The point I very strongly want to make in this debate is this: it is the Fair Work Commission that determines penalty rates. The review that is currently underway is a review initiated by the last Labor government into penalty rates. What we want is: more jobs, more shifts and more choice. But the simple fact of the matter is that if someone has to pay an unskilled young person $42 an hour to wash dishes in a coffee shop on a public holiday, that business will not open. We know that very well. We are not talking about the big end of town; we are talking about the small operators who are the engine room of this country when it comes to employment prospects for those who otherwise would not be employed.

Janet Rice (Victoria, Australian Greens) Share this | Link to this | Hansard source

I am very pleased to be speaking today on the Turnbull Liberal government's attack on penalty rates. This is a critical issue for our society. This week is national Anti-Poverty Week. It is a time to take stock of how we are going as the country of a fair go. You only have to look at this government's attacks on penalty rates, which have just been continued in the contribution by Senator Back, to see the challenges we face.

The poverty line is $400 a week for a single adult. A report by the Australian Council of Social Services has found that there are over 2.5 million Australians living in poverty. Penalty rates are an absolutely vital tool, preventing millions more Australians falling below this line.

Take, for example, a single woman in her 50s, who has a part-time textiles job on the minimum wage. Without penalty rates, her income hovers just above the poverty line. She is absolutely struggling to get by. Or take, for example, the young person who has moved to the city for university. With youth allowance at absolutely rock bottom, with student allowance at absolutely rock bottom, and with housing costs so high that it is a struggle to find money to pay the rent, working at a cafe on weekends and being paid penalty rates is the only way for that young person to survive. Think of the single parent who has been forced back into the workforce because they cannot survive on the parenting allowance, being able to earn penalty rates on weekends is the difference between their kids having food on the table and shoes on their feet. Being able to earn penalty rates is absolutely the difference between them having to spend all of their time working or at least having some time to spend with their family.

I ask the government, in their push to reduce penalty rates, to do some serious research. Go out there and talk to the people who are at the coalface of this issue. Ask the wait staff at those cafes and restaurants—which in fact are open on Sundays—the difference that penalty rates make to their lives. There are cafes, restaurants, businesses open on Sundays all over the country. Talk to the students who are working there serving them their coffee, and ask them what would it matter to them and how would it change their life if the penalty rates were not being paid. They would tell you that it is the difference between being able to pay the rent or being homeless. It is the difference between being able to afford to put food on the table versus being able to only eat two-minute noodles. It is the difference of having some time to study; to be able to survive working 20 hours a week instead of having to work 40 hours a week. This is the reality of what penalty rates mean.

I ask the government to do some research, to talk to the student counsellors at uni. Talk to them as they are struggling to work with students who are at risk of dropping out of their studies, who want to be able to study but know that they have got to earn an income to be able to do that. If they were not able to receive penalty rates the equation would not add up.

Penalty rates prevent these people from falling into the poverty cycle. They allow Australians to pay the rent, to stay in study and to have enough to eat. They are compensation for the impacts that they have on the rights of people at work, the time away from friends and family, the disadvantage of not being able to access nine to five services and the stress that night shift puts on people. These are real disadvantages and penalty rates account for this. Yet this government—the party of Work Choices—wants to destroy this safety net. We have a Prime Minister talking of the seven-day economy. This is a myth. It is pure fiction rolled out by people who invariably have the benefit of more normal hours. We all know we are in a seven-day economy when this parliament regularly sits on weekends. A seven-day economy does not mean a seven-day working week. The important parts of the weekend should be preserved. And if you have to work on weekends, you should be paid properly for it because working on weekends means missing out on catching up with friends or watching your kids play sport.

We also realise that penalty rates are not an extravagance. They are a right not a privilege. They are not something to be spent on private school fees but something that is absolutely necessary for people to get by and survive.

Sue Lines (WA, Australian Labor Party) Share this | Link to this | Hansard source

It is Anti-Poverty Week this week, not that you would notice in the Australian parliament as the government continues its attack on ordinary Australians. Since the new management took over there has been no reversal of policies which hurt Australians. In fact, the rhetoric on cutting penalty rates has increased under the Turnbull government.

Anglicare's report today, Who is being left behind states:

It's pretty hard to make a difference when the larger wheels of government policy, political ideology and economic forces are all stacked up to go the other way.

Under its new management, it is the same old, same old in terms of their direction. Despite election night promises when the old management promised the Australian people, 'We will not leave anyone behind,' we know that whoever is running the Liberal Party and their compliant mates in the National Party, Australians have seen broken promise after broken promise, and many Australians have been left behind as a direct result of the policies of this now Turnbull government. As these attacks on penalty rates have increased, Mr Turnbull, the new Prime Minister, has led the charge. No matter how many selfies he takes using public transport, the real truth is that the Prime Minister and his party are completely out of touch with ordinary working Australians who rely on penalty rates to supplement their low incomes.

Despite the PM's assertion that we live in a seven-day economy, the facts do not support that. None of our government institutions are open on weekends and all of our major sporting events and grand finals are held on weekends. It is when Australians enjoy leisure time and enjoy time with their families. Remember when the old Prime Minister said to weekend workers, 'If you don't want to work on weekends then you don't have to.' Now the new Prime Minister is saying we live in a seven-day economy. The government wants to create a two-tiered system for weekend workers, where it would seem that some workers are more entitled to penalty rates than others.

As the recent Productivity Commission report suggested, some workers—emergency service workers and some of our health workers—should get a penalty because it recognises that working weekends takes those workers away from their families. Of course, that report ignores the thousands of other workers in retail, in hospitality, in aged care, in disability services, cleaning and security workers and many more who work weekends and miss out on family time, but do not rate a mention and do not deserve a penalty rate according to the government. It is okay for their penalty rates to be cut or completely abolished. There are 4.5 million Australians who rely on penalty rates. It makes up between 30 and 50 per cent of a worker's pay. Many weekend workers are low paid.

Recently, at Labor's Fair Work Taskforce inquiry in Perth we heard from three Western Australian workers. One was aged-care worker, Judith, whose base hourly rate is $20.50. Obviously, Judith relies on her penalty rates to boost her very low pay. Without it, she told the inquiry, the family would have to sell their house or let their private health insurance go and forgo their very meagre family holidays.

In Western Australia, we have had this experiment with losing weekend penalty rates before under another Liberal government, which interestingly, like the Howard government, lost office because it went too far with harsh industrial relations law. The Court government experimented with individual workplace agreements, and for the first time in Western Australian history these agreements were able to absolutely undercut the award. What did we see over the six or seven years that these individual contracts were in force? We saw women workers' wages fall way behind. They are now 26 times more behind average male weekly earnings. Western Australia is a stand-out in terms of women being particularly low paid. We saw hospitality workers lose their weekend penalties. We saw aged-care workers, childcare workers, security officers and cleaners—all of the areas where the government thinks it is okay to take penalty rates—lose their weekend penalties.

I heard Senator Back say before that somehow this is going to create more jobs. From the Parliamentary Library's research into what happened in Western Australia I can tell you it made not one scrap of difference to the unemployment rates in Western Australia. Despite the meagre 25 or 50 per cent—or even 100 per cent that penalty rate workers lost in Western Australia as their penalty rates were completely abolished under another Liberal government—the unemployment rate remained the same, so the profits simply went into the bosses' pockets. They did not create employment.

And what is this employment that the Turnbull government thinks will be created by saving 50 per cent on a weekend penalty? More low-paid jobs and more workers who will need the support of a government that is also intent on cutting family tax benefits and making pensions line up with CPI—a government that has done nothing but cut all of those safety net benefits. That is what the government is going to do if it intends to go ahead with cutting penalty rates. If it is successful—and the Western Australian experiment was quite the opposite; it did not create more jobs. And that is a fact. That is not a survey by their boss, John Hart, from the Restaurant & Catering Industry Association—not a survey from their friend that somehow says thousands of new jobs will be magically created. This is fact, not fiction. This happened in Western Australia. One of the team in my office got a flat rate as a chef in 1998 for $13 an hour for Friday work, Saturday work and Sunday work.

When the Gallop Labor government came in and abolished individual contracts, she then started to get a penalty. And what happened? The number of workers in the kitchen remained exactly the same. Even when the boss was paying her $13 an hour there were not more workers in the kitchen. Then, when it got converted back to the award rate and she got the penalty she was entitled to, the staff remained the same. What has happened to that employer? Since then, that employer now has three top-class restaurants in Western Australia and a cafe, so obviously they never had a problem with paying penalties. The penalties that were not paid to Claire when she was there as a chef simply went into their pocket. So it is a myth to suggest that abolishing penalty rates creates more employment. The facts are there in Western Australia: not one single job was created.

I do not know where this other thought bubble of creating tax credits comes from. We know that in the UK that is another failed experiment. We know that the Turnbull government wants to remain joined at the hip to the mother country, but the reality is that tax credits in the UK have failed. Of course, we know the government can put in place schemes like tax credits and indeed can take them away. The only sure thing that workers have got is to keep their penalty rates and to make sure that employers and not our tax system continue to fund penalty rates. This is another failed Turnbull government scheme.

Bridget McKenzie (Victoria, National Party) Share this | Link to this | Hansard source

I also rise today to speak on the matter of public importance—and it is a matter of public importance, especially for those of us out in regional Australia—about regional jobs. This is about how we can actually get more young people in particular employed right across regional Australia. If you look at regional Australia, you see it is not made up of big business. It is not made up of big public service. Its local economies are made up of small businesses, and with these issues around penalty rates it does not matter whether I am in Bendigo, Wangaratta or Wodonga. It does not matter where I am across regional Victoria; when I am talking to small businesses in retail and to small business owners who are farmers, they all bring this issue up.

But first I want to state the fact that the whole attack line has absolutely no basis in fact. 'The Turnbull Liberal government's attack on penalty rates'—I would really seek Senator Moore's guidance on where she has seen any evidence that the Turnbull government is attacking penalty rates in any way. If she is referring to the government's decision to refer a number of matters, including penalty rates, to the Productivity Commission for examination and independent analysis, I am not sure how she can call that an attack on penalty rates.

Once again I think Labor descends into the only playbook it has. Thank goodness they are not running the Wallabies over at the world cup, because they have only got one play: the scare campaign. When confronted with an issue, problem or policy challenge, where does Bill Shorten run while his whole team stands behind him even though they know it is a poor strategy, particularly with respect to ChAFTA? He goes to the scare campaign. Instead of having an intelligent, articulate conversation within the public arena, we choose to go to the lowest common denominator, and that is fear. I would rather have a conversation around evidence, which I think we will be able to have once the Productivity Commission brings down its report. Rather than run pointless MPIs such as the one before us today that we are forced to debate, we could actually have a sensible conversation.

Instead Labor prefers the old battle lines and tired union rhetoric and ignores the fact that we do more for job creation and industry growth from the coalition side than Labor's backbenchers and branch stackers can think up. They are more worried about getting their union juice through untraceable means than truly putting their members or any other Australians first.

We cannot be attacking penalty rates when we have left that for other, independent areas to assess. We have made a very clear distinction. The way penalty rates are set is not going to be changed. I remind the Senate that the last and only time in Australian history that penalty rates were lowered was following the review of the fair work laws—a review which Labor commenced with their Minister for Workplace Relations: Minister Shorten. Don't let the facts or the 21st century get in the way of a good old-fashioned scare campaign.

Whilst this is obviously before other institutions, I do have some comments to make, particularly from a regional Australia perspective, on the issue of penalty rates. Despite the claims of those opposite, as the daughter of a small business owner and as somebody who is out in communities talking to small businesses constantly, I know that penalty rates do make a difference with regard to when businesses open, who they put on and whether they have a casualised or a permanent part-time workforce. These are the decisions that small business owners are making every single day, so when others talk about how it does not have an impact on employment that is simply incorrect because there is an opportunity loss for small businesses who choose not to employ as a result of the impost of penalty rates.

I am going to mention a few instances. The pig industry: you cannot tell me that a pig needs less care or any different type of care on a Saturday and a Sunday than it does on a Monday. A pig does not get dressed up to go to church; a pig does not have kids to look after. Yet to look after a pig—to see to it and tend to its welfare—Saturday and Sunday work is deemed overtime and outside usual working hours. I do not think that there are 'usual working hours' if you are looking after pigs, other than that they probably sleep at night. Pig care does not actually follow a weekly timetable. The consequence of penalty rates and the three-hour minimum engagement is that one hour of work on a Saturday attracts 4½ hours pay, one hour on a Sunday attracts six hours pay and one hour on a public holiday—like the Andrews' government with their latest grand final eve 'everyone can clock off early for a long weekend' holiday in my home state of Victoria—attracts 7½ hours additional pay. The National Farmers Federation stated:

On a Sunday, the combined effect of these provisions for one hour’s work is equivalent to $100 per hour.

You cannot tell me that has no effect on an employer's capacity to pay more and more to additional staff, to reinvest in their business and to grow regional jobs. Dairy farmers are stretching themselves and choosing to undertake the extra work themselves rather than incur the extra costs. We have small business owners that are working themselves to the bone, never having a weekend off, never having a public holiday and never getting to their children's sports events because they cannot afford to replace their own working hours with staff.

Look at the tourism industry across regional Australia. The iconic tourist attractions in this country are based in regional areas. Look at the Great Barrier Reef and Uluru; in my home state there is the Great Ocean Road, the wine regions of the Yarra Valley and Rutherglen, the Prom—right in the heart of Victoria. These are iconic tourism industries. You cannot tell me that they do not get their best trade on a Saturday and Sunday when public service workers from Melbourne head out into the regions to have a taste of what we get every day—that is, a fabulous community to live in, some wonderful industries and some fabulous local product. For those tourism industries to keep their cellar doors open is incredibly hard. Not if you are big like Seppelt, not if you are a massive employer, but if you are a small business or a small wine producer, then keeping that cellar door open and paying those penalty rates is absolutely difficult.

I spoke to Gerald Taylor recently—he used to own Taylor's seafood restaurant down on Phillip Island—and I asked him about penalty rates. He said: 'Bridget, it killed us. It was not worth opening.' If you talk to those people who are living below the poverty line or on the poverty line or just above the poverty line, Senator Rice, and ask them if they would like three hours work on a Sunday at 20 bucks an hour or at 45 bucks an hour or nothing, I tell you what: they will take the 20 bucks an hour every time because that will put money in their pockets, allow them to care for their children and put food on the table. That is the reality; otherwise we keep the 45 bucks an hour and they do not get anything. They do not get anything because small business is not putting it on.

Another regional industry with high employment is the racing industry. Here is a fun fact for the Senate: currently, on a Sunday if you want to shovel out a stall of a racehorse you will attract $40 an hour. That is 40 bucks an hour on a Sunday to shovel out a horse stall. There is no bachelor degree for that one—you just need strong muscles and probably a nose peg—but 40 bucks an hour is a pretty nice take home pay. It is sending these industries broke. It means the racing industry either compromises on the welfare of its animals or it ceases to employ people and shuts down in local communities—an absolute indictment.

I think we should be looking at penalty rates because I want to see more regional Australians employed. Job creation in the regions should be at the forefront of our minds. Given the peaks and troughs of harvest and picking—I think of the great Goulburn Valley in the Shepparton area—the fruit does not wait until a Monday and you do not get any more money for it at market if it is picked on a Monday or a Sunday—not at all. This is the reality that people live with in regional Australia every day as they are seeking to grow and develop their business, as they are seeking to grow our local economies across regional Australia. You cannot tell me Greens, as you seek for the regional Australia vote, and you cannot tell me Labor, as you pretend to be a fan of the workers as long as they are working in the public service or as long as they working in the cities—these people need jobs. Our local communities need industry, they need to keep employing. Our harvests do not wait for Sunday or Monday. We need to get the crop off and we do not get any more money on the global market or the domestic market based on when it is harvested. I have so much more to say about this issue. Like he did with ChAFTA and the TPP, Bill 'Scare Campaign' Shorten must stop. Find another play and actually wait for evidence rather than stir up fear. (Time expired).

Bob Day (SA, Family First Party) Share this | Link to this | Hansard source

( We hear a lot in this place about what employers want and we hear a lot about what unions want, but what about what the unemployed want? They want a job. My home state of South Australia now has the worst unemployment in the nation. My question is: who is going in to bat for the unemployed? They have no voice. We have a voice. Unions have a voice. Employers and business have a voice, but who is there to speak up, to judge fairly and to defend the rights of the poor, the needy and the unemployed? Who will release them from this regulation prison? They cannot escape. They are told, 'We have to lock you up in this regulation prison for your own good because you might be exploited if we let you out.'

These regulations make it illegal for the unemployed to work on terms and conditions which suit them. I ask: why should it be illegal for an unemployed person to say to a cafe owner, 'I'm unemployed. I'm getting five dollars an hour. I see you're closed on Sundays. Can I work for you for $20 an hour?' That would be illegal. This is 2015. We are in the area of Uber, Netflix, Spotify and Tesla. It is high time we let the unemployed out of the regulation prison and into the 21st century.

Anne Urquhart (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

In recent times, we have seen the Liberals lining up to attack Australian workers and their penalty rates. Mr Andrew Nikolic, Mr Wyatt Roy, Mr George Christensen, Senator Edwards and Senator Seselja are just a few of the slew of Liberals who have lined up to take a shot at dragging down the pay of some of Australia's poorest workers. We have also learnt in recent weeks that the transfer to a new leader has in no way quenched the Liberals' thirst for reducing the working conditions of ordinary Australians. Clearly, change at the top has not resulted in a change of direction when it comes to slashing wages for some of Australia's lowest paid workers.

Employment minister Senator Cash has said she wants the debate to be opened up again. Cabinet member Mr Josh Frydenberg said that penalty rates are costing jobs. And now Prime Minister Turnbull himself seems to have caved in to the pressure in his party by admitting that penalty rate cuts are likely.

Worse, Mr Turnbull has said that the job of the government is to persuade workers that they are not going to be worse off. Notice the key word here is 'persuade', not 'ensure'. Penalty rates are a key feature of Australian workplace arrangements in many industries. They recognise that those who are forced or who choose to work on weekends make a big sacrifice in terms of time with their family and friends. They help to keep the system fair and they help millions of Australians to make ends meet. The hard-working Australians who rely on penalty rates are among the lowest paid in the country. Without penalty rates, millions of Australians would be forced into poverty or forced to find work in another sector.

Like it or not, the Monday-to-Friday working week is still a key feature of our society and of our culture. When the Grand Final is held on a Tuesday, when people regularly get married on Wednesdays and when parliament sits on a Sunday, then you can talk to me about our seven-day-a-week economy. Until then, it is as plain as day that our weekends matter. And it is clear that the Liberal members' call to cut penalty rates on the basis of a supposed seven-day economy ring very hollow indeed.

Weekends are special and those who work on them should be adequately compensated. Those who work unsociable or long hours sacrifice a lot in terms of time with family and friends. Let us not forget that the people who rely on penalty rates already earn among the lowest wages in the country. At the minimum wage without penalty rates there is barely a dollar left over for many Australian workers. If penalty rates are ripped away by this government, hundreds of thousands of Australians will not be able to meet their basic living costs and many of them will be forced into serious debt just to survive.

According to the Australian Bureau of Statistics, the average weekly wage for retail workers was $553.70 a week in 2014. For workers in accommodation and food services, this figure was even lower at $519.20 a week. Without penalty rates, millions of workers in these industries simply will not be able to make ends meet. Perhaps it is easy for Liberal MPs and ministers in this place on a minimum of around $200,000 a year to forget what it is like living from pay cheque to pay cheque or, worse, from meal to meal. Many who work full time will be stretched to the limit.

Let us not forget that many people who rely on penalty rates do not work full-time. Whether they have children or other caring responsibilities or just are not able to secure full-time work, these people will be pushed to brink. It is important to remember that a huge number of Australians who rely on penalty rates to survive are students. Without penalty rates, without a liveable income, many would be faced with a simple but devastating choice: find a job that pays enough for survival or quit studying.

Given our high unemployment rate, the first option might very well be impossible. Education may be the thing that has to give. Clearly, this is not an outcome that we in this place want to encourage. Clearly, we need to encourage our brightest young minds to achieve the very greatest things they can for themselves and for our country and clearly, we do not want to starve their potential. Cabinet Minister Josh Frydenberg recently made the claim that penalty rates are costing jobs and that their removal would create a jobs boost. Quite frankly, this argument shows a very limited understanding of basic economic theory. Certainly, if penalty rates were removed there would be more money in employers' pockets. No one is disputing that. But the suggestion that this would lead to job creation completely ignores the demand side of the equation.

A basic reality of business is that job creation is driven by consumer demand for products and services. Only a foolish business owner would take on extra staff if there was no work for them to do. And demand is heavily impacted by how much money consumers are able to part with. There is absolutely no reason to think that removing penalty rates would magically increase consumer demand or create extra customers with more money.

In fact, a reduction in penalty rates is likely to have exactly the opposite effect, especially in regional communities. By slashing wages, you very effectively reduce disposable income. By reducing the take-home pay of as many as 4½ million Australians who rely on penalty rates, you would force a pretty serious hit on the total disposable income available to be spent on products and services. In areas where many people are reliant on penalty rates, a reduction in disposable income can only affect the ability of these individuals to spend money in their local communities. While they probably will not be able to cut back on the basics like food, rent and bills, the first thing to go would be discretionary spending at—you guessed it—local retail and hospitality outlets.

In fact, the McKell Institute has done some very interesting work on the economy-level impacts of cutting penalty rates. In a recent discussion paper, the institute found that even a partial abolition of penalty rates in the retail and hospitality sectors would see workers in rural New South Wales losing between $118 million and $220 million each year. This works out to be a hit to disposable income—and thus to local economies in rural New South Wales—in the order of between $53 million and $106 million every year. And now it seems the Turnbull government want to levy this pain on regional economies across the country.

Economists understand that solid wage growth is a hallmark of a healthy economy. Sadly, Australian wage growth has flatlined. Only one with a very feeble grasp of basic economics would respond to this problem by further slashing the income of millions of Australians. If Mr Turnbull could see past the ideology that drives his Liberal puppet masters, he would recognise that cutting penalty rates would be bad for workers, bad for business, bad for regional economies and bad for Australia as a whole because of the lack of income and disposable income at the forefront of the regional communities that rely on it to survive.

Ian Macdonald (Queensland, Liberal Party) Share this | Link to this | Hansard source

Having just returned from 10 days driving around the north and the north-west of Queensland, seeing communities in drought and seeing property owners working 23 hours a day just to try to save stock with no income at all for the year, it makes me physically sick to hear the speeches from Labor members, scripted by the unions, about penalty rates and business.

First of all, I have to be clear: the government does not deal with penalty rates. Penalty rates are a matter for the Fair Work Commission to determine, not the government. But the government has asked the Productivity Commission to undertake a review of the workplace relations system to ensure fair work laws for everyone. Everyone in this country needs a job. The more the Labor Party and the unions price Australians out of jobs the greater will be the unemployment and the more difficult it will be for an average Australian family to have a wage earner.

Thanks to Labor policies of years ago, the mining industry in Australia is on its knees. You have just heard that in my state Glencore is sacking another 550-odd workers, people who should have had good jobs, people who should have been supported by the union movement and the Labor Party but who over the years of the Rudd-Gillard-Rudd government were abandoned by the unions as the government imposed restrictions on mining companies that sent mining investment overseas.

As I said, where I have been, Australian families work 23 hours a day with no thought of penalty rates, with no thought of any income at all. They are just trying to keep cattle alive. I hate to come here and hear the bleating of union hacks about how important penalty rates are.

I also spend a lot of time in the Cairns-Townsville region, where tourism is a very, very big industry. Young people will tell you what they want is a job in the industry. They do not want to have triple time for Sunday work because, for many young people, Saturday and Sunday are exactly the same as Wednesday and Thursday. They can go surfing or swimming on any day of the week and those things, in fact, mean little. But what they do want is the certainty of a job. Under Labor's proposals, that is becoming less and less certain.

If any of the Labor senators would ever get out of their central city offices they would see that there are a lot of jobs available in Queensland. But do you know who is taking them? It is foreign backpackers. Why? It is because employers cannot get Australian young people to do those jobs. So the backpackers come in and they think it is pretty wonderful. They get the job, they get the pay and they even get the penalty rates.

The whole system is really such that we as Australians have to look at our productivity. We have to wake up to ourselves. We cannot rely on Australia's natural resources to let us do what we want to do. Penalty rates should be part of the mix that the Productivity Commission looks into.

I heard the previous speaker asking a question on where the additional jobs will come from if penalty rates were scrapped. As I have before many times in this place, I will tell you where a lot of the jobs would come from. Small business owners, particularly in the hospitality industry, because there are a lot of people around them demanding their services, as well as working a normal five-day week will work 10 hours on Saturday and Sunday. They will bring in family members, perhaps. They themselves, in order to have an afternoon off or an after-lunch sleep, would bring in employees. They would bring in young people to do the work if they did not have to pay them what they see as outrageous penalty rates in the hospitality industry on the weekends and at night.

I think most Australians understand that if you have got people working in the hospitality industry at midnight and going through until two o'clock at night, then of course they do deserve something additional. But working on Saturday and Sunday really does not demand the sorts of penalty rates that are currently being paid, particularly to young people in the hospitality industry.

I am not here today to give the formula or make suggestions on how these things should happen. That is a matter for people much better qualified than I am, and that is why the government has asked the independent Productivity Commission to undertake a review of the workplace relations system to ensure that fair work laws work fairly for everybody.

There is a lot of opportunity for additional employment, if the cost of employing people, particularly in the hospitality industry on weekends and in the early evenings, was not prohibited. It would mean people in small business would be able to get some sort of a break from a job which in many instances involves them working 20 hours a day with, I might add, no penalty rates at all. They are simply small business people who earn what they can and produce something positive for society. (Time expired)

John Madigan (Victoria, Independent) Share this | Link to this | Hansard source

Penalty rates are again in the spotlight. Our Prime Minister has questioned the reason for their existence, putting it down to a freak result of history. The fact of the matter is penalty rates provide recognition of the work undertaken at otherwise inconvenient times, whether it is for work undertaken on a Saturday or a Sunday when many family and community functions are held or on a public holiday when one is missing out on quality time with those whom they are closest to.

Mamamia News has done a fantastic job in summarising quite succinctly the reason why we pay penalty rates. They say:

Most people work weekends for money, not love, slogging it out on a day they would prefer to spend with their families to pay the bills. They are the ones who will be taking a pay cut.

Penalty rates protect the sanctity of our weekends because our lives are more than just our jobs, and being compensated with extra pay for working unsociable and unpopular hours is widely considered fair game.

In summary, penalty rates are paid to Australians who are generally on lower, less stable incomes. Penalty rates are generally paid to Australians for doing their best to get ahead in life. It is for these reasons that I will not support the undermining of penalty rates now or in the future. Thank you.

David Leyonhjelm (NSW, Liberal Democratic Party) Share this | Link to this | Hansard source

Today's topic is the Turnbull Liberal government's attack on penalty rates. I take umbrage at this. The Turnbull Liberal government has not attacked penalty rates; I have. On behalf of the Liberal Democrats, I introduced a bill to abolish weekend penalty rates for small businesses. It was co-sponsored by Senator Day. The government has done nothing.

Similarly, the Council of Small Business, the Liberal Party cheer squad, that pretends to represent small business has done nothing. The council has even attacked my bill, saying, 'Weekends are still weekends' and medium sized businesses would see my bill as unfair.

If you are a small business that wants real representation, I suggest you dump your membership of the council and join the Liberal Democrats or, worst case, Family First.

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

Order! The time for the discussion has expired.