Jenny McAllister (NSW, Australian Labor Party) Share this | Link to this | Hansard source

I move:

That the Senate take note of the answers given by the Attorney-General (Senator Brandis) and the Minister for Employment (Senator Cash) to questions without notice asked by Senators McAllister and Cameron today relating to the annual wage review conducted by the Fair Work Commission.

I rise to take note of the answers given by Senator Brandis and Senator Cash to questions asked by me and Senator Cameron. This may be a first for question time: this afternoon, Senator Cash has been unable to answer a basic question that is relevant to not just one but both of her portfolios. You will recall that Senator Cameron asked Senator Cash how the minimum wage would impact on the gender pay gap. But, despite being the Minister for Employment and Minister for Women, Senator Cash basically ducked the question. She named 16 per cent as the current gender pay gap, but that is just one measure, and the same agency that she oversees cites a much higher number for the gender pay gap because the gender pay gap, when you consider total full-time remuneration, is actually 23.1 per cent. It means that men are earning, on average, more than $26,000 a year more than women, and I note also that this gap is much higher in the private sector than in the public sector.

But the big issue is that the answer she gave also completely missed the point about men's work and women's work. It is not the case that, if we wish to consider closing the gender pay gap, we need to look at higher income people, because the truth is that one of the key drivers of the gender pay gap is occupational and industrial segregation. If you want to unpack that and put it in normal language, it means that women are far more likely to work in low-paid jobs within a particular industry or within industries that have very, very low rates of pay—and the minimum wage is absolutely relevant to the take-home pay for those women and it is absolutely relevant to the gender pay gap. Thirty per cent of the gender pay gap arises from industrial and occupational segregation, and those are stats that, again, come from the minister's own agency. When we look to the future, the new, high-paid jobs that are anticipated to come into the economy seem likely to be created in industries that are dominated by men, but the new jobs that are likely to be taken by women are part time, casualised and in very, very low paid, caring industries traditionally occupied by women. Lifting the minimum wage absolutely helps to close this gap, and it is astonishing that the Minister for Women would point us away from low-paid women when we are talking about the gender pay gap and ask us to consider better paid women. The money that we are talking about might not matter that much for a partner in a law firm, but it matters for the people on the minimum wage and it matters for their families. Many of these people are in care work, caring for our ageing population, for people in our community with a disability and for children—and care work is highly feminised and underpaid.

I had a look at some of the other, more thoughtful submissions to the Fair Work Commission around this question of the minimum wage, and I took a look, you will be interested to know, Madam Deputy President, at the submission made by United Voice—because they actually do listen to real people. They do listen to the women who are working in care work and in low-paid, feminised jobs. They quote testimony from a woman named Ruth, who is a cleaner in outer suburban Sydney. She says: 'Recently I had to find the money for a deposit for three excursions. I had to go without in groceries that week to make sure we had the money.' That is the reality of the low paid in this country. This is a situation where a family, to meet the basic objectives of schooling, be part of the school community and participate in an excursion, had to go without groceries. That is disgraceful and it is astonishing that, under these circumstances, where wages are flat and where so many families are doing it tough, this government has refused to provide support for an increase to the minimum wage. I am, frankly, shocked that, in a week where the government has faced so much criticism about its heartless approach to penalty rates and its persistence in offering a $50 billion tax cut to our largest businesses and to our financial institutions, it is unable to come to grips with the seriousness of this issue and the challenges faced by low-wage people in Australia.

Jonathon Duniam (Tasmania, Liberal Party) Share this | Link to this | Hansard source

I want to start where Senator McAllister left off in taking note of the answers given today to those questions referred to with regard to the minimum wage and the annual wage review. It is important to point out elements of the answers that were given today with regard to the importance of business as employers and the need not to impose on businesses undue burden. They are the ones paying the wages and, if a business is burdened to an extent where it becomes unviable, a non-commercial entity, then the business closes down, the jobs go and those people Senator McAllister referred to in her contribution then do not have jobs to pay for the expenses she mentioned—groceries, schooling and things like that.

It is also important to go over some of the points that were made in the answers by ministers in question time. I think the most revealing of the points made was the fact that the government's submission to the annual wage review is extremely similar to the submissions that have been made by successive governments over many years. As we know, in the years prior to 2013, we had a Labor government, led by Prime Minister Gillard and Prime Minister Rudd, and, of course, we had an employment minister who happens now to be the Leader of the Opposition. So we need to look at what they did when they were lodging submissions to the annual wage review. Points that were made included this. Bill Shorten, as the responsible minister, said that the minimum wage should increase but not be 'set so high as to place undue financial burden on businesses, discouraging them from employing low-skilled workers', whilst also noting that Australia has one of the highest minimum wages in the developed world. That is absolutely correct and that fact stands today. We cannot ignore that fact. This notion that business is some sort of monolithic cash cow that can churn out pay rises instantaneously is just not realistic. We have to remember that in this debate.

In her contribution, Senator McAllister also referred to the debate on penalty rates, and the same thinking should apply there, too. There is this notion going around that business can and should be able to afford pay increases all the time. The reality is that the increased burdens, the increased expenses to business and costs on running a business—small business, particuarly, where many of these low-paid workers are employed—can send these people out of business. The end result of that, of course, is that there are no jobs; they get no pay at all.

Going back to the points that have been made by ministers previously: there has been incredible consistency in the government's submissions to the annual wage review over many years. As Senator Cash said in her answer: in 2011, 2012 and 2013, all of the submissions repeated the same information, and this notion that was advanced by Senator Cameron—by interjection, I think, not in asking the question—that the advice was to get rich parents or marry up is a ridiculous suggestion in my view. No-one said that; no-one would ever suggest that. The fact that that suggestion is being made by Senator Cameron in his interjection when the submission made by this government to the annual wage review is consistent with the submissions by previous governments, including Labor governments, was made at a time when we had an employment minister in the now opposition leader, Mr Bill Shorten—is he suggesting that the submissions back then had the same message for low-paid workers? I don't think so; I think he knows how ridiculous that assertion was.

I conclude by saying: it is just cheap politics to try and pick selective quotes out of the submission to mount a case that this government is somehow the enemy of the worker, when we are doing precisely what governments before us have done. We are also supporting small business—and business generally—to create jobs and to assist them to invest so that they can keep the economy ticking over.

Chris Ketter (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

I listened very intently to the answers to questions asked by Senator McAllister and Senator Cameron today in relation to the minimum wage. Unfortunately, I was extremely disappointed with the responses, and I was hoping that the government senators would get on board with the much more reasonable position, which the opposition has put to the Fair Work Commission, in relation to the minimum wage case. I think it is worthwhile just pointing out the stark contrast between the opposition's position in relation to minimum wage increase as against the government's.

The opposition's submission talked about the fact that the panel's decision should be one that firmly supports a fair and economically responsible increase in the national minimum wage and all modern award wage rates—and I want to return to that point, because I think it is something that is overlooked in this debate. The opposition's submission also made reference to the fact that, whilst the opposition respects the independence of the commission, any variation of a modern award which results in the reduction of a take-home pay is unacceptable and inconsistent with the intention of parliament. We have a position where we understand that there is the prospect of a reduction in take-home pay and there is a real need for the commission to take this into account.

It is interesting that one part of the government does not seem to understand what the other part is doing, and there is a very jumbled set of twisted priorities coming out of this government. I have mentioned in previous speeches in this place that the Treasurer, quite usefully, has said in recent times that he acknowledges that record low wage growth is the biggest challenge facing the Australian economy.

One would have thought that, presented with the prospect of a cut to take-home pay through a penalty rate adjustment, this government should get on board with the minimum wage case and support a fair and economically responsible increase in the minimum wage. That would be the sensible thing to do, if you really do believe that low wage growth is Australia's biggest economic challenge. But, of course, here we see in the government's submission to the national wage case that they are saying that a minimum wage increase is not an efficient way to address living standards and they are throwing all sorts of other barriers in the way of the commission implementing a fair increase in minimum wages.

It is significant to note that the national wage bench does take particular regard to the submissions of the government of the day. I think they are very, very persuasive submissions and that adds to the tragedy of the situation where we have a government which claims to be interested in addressing the issue of low wage growth but, at the same time, coming out to the national wage bench and saying: 'Be very, very cautious about what you do here. It may add to unemployment et cetera.' This is a government with mixed messages and twisted priorities, and I think the workers of Australia are entitled to be very, very disappointed with this government's approach. They do not care about the interests of ordinary workers. They stand condemned for their inaction in relation to the cut to penalty rates.

There are some on our side of politics who understand the importance of the minimum wage case. It is a wonderful opportunity to address the issue of inclusive growth in our economy. The minimum wage does play a very important role not only for people on the actual minimum wage itself but it flows through to millions of workers who are award dependent, so this is a very important mechanism for addressing living standards, contrary to the government's submission.

In my closing few seconds, I want to give a shout-out to Margarita Murray-Stark who, I understand, is in Parliament House, meeting with various members of parliament. Margarita is affected by the penalty rates cuts. She believes she would earn $2,000 less and has decided to come to parliament to talk to MPs and, hopefully, to the Prime Minister. So good luck, Margarita, with that.

David Fawcett (SA, Liberal Party) Share this | Link to this | Hansard source

I too rise to take note of the answers to questions, and I would like to talk about some of the principles involved, the process and the purpose of the Fair Work Commission, and lastly to reflect on the politics that so underpins arguments in this place that, unfortunately, are sometimes to the detriment of constructive development of good public policy.

In this place, for a number of years now, I thought there had been fairly broad acceptance by parties on both sides of this chamber that the conditions under which workers work and are employed—whether that comes to penalty rates or minimum wages—should be set by an independent body. That should remove much of the politics out of it. Just as we have the Reserve Bank, which is free to set interest rates, we have an independent body that makes these agreements. What that means is that it can take submissions from a wide range of people to consider both facts and, importantly, the context and how the context is changing, and the commission brings together a wide range of skills and people with different backgrounds who understand different aspects, whether it is the economy, the community or workforce implications. There are a range of perspectives that are brought to that detailed consideration of facts. So I had thought there was a well-established principle, supported by both sides of politics, that we would have an independent body to do this and remove the politicking of the parliament out of affecting the conditions that people work and live to.

The process has been followed by successive governments. Not only governments of this side but Labor governments have followed the same process. And do you know what? The submissions, in terms of their content and form, looked remarkably similar, for the simple reason that governments have departments who help advise and prepare briefs. It should be no surprise that the sorts of things they submit are similar. When Mr Shorten was the employment minister, there was no figure in his submissions on minimum wages. They put forward the same kind of principle-based arguments that the coalition government has done. So, if the Labor Party applied to their own submissions the same standard of criticism they apply to this government's submissions, they would have to come up with the same conclusions.

In question time today they have criticised the inclusion of facts, and they cherry-picked the fact that the government's submission says that nearly half of low-paid workers are in the top 50 per cent of household income. They are saying that means that the government must be out of touch, because they are making comments like that. Well, Dr Leigh, from the opposition in the other place, made these comments shortly before Labor came to government:

Given that the typical minimum wage worker lives in a middle-income household, it appears unlikely that raising the minimum wage will significantly lower family income inequality.

Mr Shorten, in 2013 in the government submission, said:

The Panel should also consider the fact that all low paid workers do not necessarily live in low income households.

…   …   …

Furthermore, the Government's analysis reveals that around 60 per cent of low-paid employees live in a household with more than one income earner and therefore their living standards are affected by income from other household members.

So the things that, for political reasons, the opposition is dragging up and criticising the government for here have been part of the same process that their own ministers—in fact, the Leader of the Opposition when he was the responsible minister—made.

Why do the Fair Work Commission look at things like minimum wages? What are some of the things they take into account? One of the purposes, as articulated by this government and as articulated by the opposition when they were in government, is to recognise that, if you increase the minimum wage too far, you will in fact impact on small business and their ability to employ low-skilled workers. Mr Shorten has made that point himself when he was the responsible minister in government. So the principle should be supported by both sides and, until this debate, I thought it had been. The process, unsurprisingly, is the same whether the ALP or the coalition is in government. The purpose is about making sure there are more jobs. Unfortunately, the politics from the opposition gets in the way.

Malarndirri McCarthy (NT, Australian Labor Party) Share this | Link to this | Hansard source

What this government is refusing to do is to commit to a rise in minimum wage levels. Many Australian families are doing it really tough—much tougher than they need to, because this government would rather give tax cuts to the rich than a wage rise to struggling workers. I just want to echo Brendan O'Connor, our shadow minister for employment and workplace relations, who says that if you do not increase the minimum wage then you are ensuring that, in real terms, wages go down, because prices do not stop rising. That is why we need to make sure the minimum wage keeps up with price increases and preferably goes further to address inequality in this country—yes, inequality. That is why Labor is clear that we want to make sure that there is a decent, livable minimum wage, because we care about fairness in this country and we are concerned about inequality.

The Minister for Women today attempted to defend the government's position by arguing that there is no gender pay gap on the minimum wage. Even though women make up the majority of low-paid workers in Australia, it is all good, because they are earning the same low amounts as the minority of men on the minimum wage, because apparently it is not about gender. Perhaps the minister is not aware of the ACTU's report The gender pay gap over the life cycle from last year, which revealed women are financially disadvantaged at every key stage of their lives: in childhood, at the workplace, through pregnancy, through motherhood, as a carer and in retirement. This report also found that women are earning less on average in relation to men than they were 20 years ago. Women earn around $284.20 less per week than men, and 70 per cent of part-time work is undertaken by women.

Evidence from the Census Bureau in the United States shows that, in the states with a high minimum wage, wages growth for women was strong and, in the states where the minimum wage increased in 2015, workers with the lowest incomes—those whose wages were in the bottom 10 per cent—experienced much faster wage growth than those workers in states where no minimum wage change took place. This wage growth was particularly strong for women, who make up two-thirds of low-wage workers in the US.

There is absolutely no doubt that an increase in the minimum wage would address relative living standards and the needs of the low paid. These are workers who are still feeling the very real pain of the decision to cut penalty rates.

In a show of just how out of touch this government truly is, it says, 'Low-paid workers are often found in high-income households.' Go and visit a household in an Alice Springs town camp where I know of working mums supporting up to 10 or more family members all living in the same three-bedroom, one-bathroom home. Go and visit a family in a remote community where you can pay up to $9 for a lettuce and tell a young person working on a minimum wage there that they do not deserve a pay rise.

The Northern Territory is certainly a wonderful place to live, but it is not an inexpensive place to live, and that is the reality. It is tough for low-income workers, and it is about to get tougher with the GST cuts affecting the Territory's budget. Young Territorians in particular are going to find it tough. A decent increase in the minimum wage would mean an enormous amount to low-income earners. A strong minimum wage helps close the gap between rich and poor; it provides a much-needed economic boost; it means people have more money to spend; and it certainly assists small business and drives local economies.

Question agreed to.