Michaelia Cash rebuffs ACTU pay push

The Australian, November 2, 2017

Employment Minister Michaelia Cash has rebuffed an ACTU call to change the federal workplace laws to progressively lift the national minimum wage by $80 per week.

Reviving the name the union movement gave to its annual minimum wage claim during the Howard Government years, the ACTU’s Living Wage claim seeks to lift the minimum wage determined annually by the Fair Work Commission to 60 per cent of median wages.

ACTU secretary Sally McManus said unions wanted the government to change the Fair Work Act before next year’s wage case to require the commission to give “primacy” to the needs of workers when determining an annual increase.

In maintaining a safety net of fair minimum wages, the commission currently must take into account a range of criteria including the “relative living standards and needs of the low-paid”.

But it must also consider the performance and competitiveness of the national economy including productivity, business competitiveness and viability, inflation and employment growth.

In its decision this year, the commission noted the Fair Work Act did not direct it to target poverty among workers.

Ms McManus said the commission should be asked to target poverty and give priority to the relative living standards of workers.

“We think the number one criteria should be to make sure that no working person works full-time and lives in poverty, as a principle,’’ she said.

“Once we have reached that principle, we can consider the other criteria but that is not negotiable.”

She said the $80 a week increase should be phased in “as soon as possible” with initial larger wages to close the gap.

Opposition workplace relations spokesman Brendan O’Connor welcomed the ACTU proposal, saying Labor would consider the suggestions along with those of other stakeholders, including business.

“Federal Labor is committed to arresting the decline in the minimum wage as a proportion of the average wage in order to redress growing inequality and that is why we were the first ever Opposition to make a submission to the national wage case in 2015,’’ Mr O’Connor said.

But the Government does not intend to propose amending the Fair Work Act to change the criteria considered by the commission.

“The minimum wage is reviewed each year by the independent umpire, the Fair Work Commission,’’ a spokesman for Senator Cash said.

“In making its determination the commission considers significant amounts of evidence, including the need to ensure the creation of entry-level job opportunities, in addition to relative living standards and the needs of the low paid.”

“At present, 1.9 per cent of Australian workers are on the national minimum wage and the commission recently increased it by 3.3 per cent, well above the rate of CPI. The ACTU is entitled to make submissions to future annual reviews, as is any union, employee or employer.”

Employer groups expressed opposition to the ACTU proposals, arguing Australian had the third highest minimum wage in the world after the Netherlands and Luxembourg.

Australian Industry Group chief executive Innes Willox pointed out the ACTU has previously called its national wage claim a “living wage” claim. The peak union council used the term to describe its minimum wage claims in 1997, 2001 and 2002.

“An unsustainably large increase in minimum wages, like that being proposed by the ACTU, would simply harm low paid workers because employers would have less capacity to take on new workers and there would be less job security for existing workers,’’ Mr Willox said.

“Tax transfer payments like the Family Tax Benefit are a superior way to provide income support to the low paid than requiring employers to provide unsustainably high wage increases. When wage increases are awarded, the cost to businesses is much higher because employers need to pay all the on-costs like superannuation, payroll tax etc.”

Scott Barklamb, workplace relations director at the Australian Chamber of Commerce and Industry, said “lower wage positions are often a stepping stone to higher paid jobs”.

“If wages get ahead of what small businesses can afford to pay it makes it really hard to create and maintain jobs, particularly for young people looking to enter the labour market,’’ he said.

“Many small business owners already take home less than their staff. We need businesses and productivity to be growing in order for wages to rise.”