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Morrison Government forges ahead with penalty rate cuts

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Shadow Industrial Relations Minister Tony Burke (Screenshot via YouTube)

Shadow Industrial Relations Minister Tony Burke has hit out at the Morrison Government for not blocking or at least delaying the timing of the final round of Sunday penalty rates cuts.

Burke – in a statement which coincided with the passing on of the Fair Work Commission’s 1.75 per cent pay rise – believes the cuts in the midst of the COVID-19 pandemic and an economic recession could have been planned better to help better stimulate the economy.

Burke said:

'These cuts never made sense, but they make even less sense in a recession.'

Burke implied that a minimum one-year delay to the final round of Sunday penalty rates cuts, in a time of crisis, would have been a more appropriate move by the Morrison Government:

'This is not the time for cuts and austerity...To lift Australia out of recession, we need people spending and fuelling domestic demand. Cutting the pay of our lowest-paid workers will only make this recession deeper and longer.'

The Shop, Distributive and Allied Employees Association (SDA) went as far as to appeal the decision. However, on Wednesday (1 July), the FWC officially denied that appeal, as one of its spokesmen claimed that it “lacked merit”.

As the SDA called the FWC’s appeal verdict “unjust and unfair”, Gerard Dwyer, the union’s national secretary, took the time to spare a thought for those frontline workers in his union who have given everything, heart and soul, in the first few months of the current COVID-19 pandemic:

Dwyer said:

“In the face of abuse and threats of violence as well as risks to their health, retail workers stepped up to ensure the community had food on their tables, petrol in their vehicles and medicines for their wellbeing."

Burke’s comments come on the heels of commentary from various union leaders following the FWC announcement of pay rises amounting to $13 per week for the nation’s minimum wage workers.

And the potential cancelling-out of those pay rises on account of the penalty rates cuts – which, incidentally, have failed to create any new jobs in the retail and hospitality industries, despite what business lobby groups claimed would have happened – wasn’t lost on them as a group, either.

Amid the FWC’s extending of the annual pay rise – which Burke had previously stated “was less than it was last year” but nonetheless welcomed – several issues remain:

  • the Australian Council of Trade Unions (ACTU) had requested a four per cent increase (or $30 per week for minimum waged workers), as it does annually in their ongoing negotiations with the FWC;
  • the FWC’s pay rise – as a worst-case scenario – only brings an extra 34 cents per hour to those on the minimum wage; and
  • this year’s FWC decision raises the typical minimum-wage worker’s salary to a median figure of $39,167.60, while the average salary in Australia, for full-time workers, is $86,252.40.

And then there is the staggered application of the pay rise, as opposed to applying it across the entire workforce simultaneously, which has been the standard practice every other year.

This year's increase will instead be applied as follows:

  • frontline healthcare, social assistance, teachers, childcare and early childhood educators would have received their pay rises on 1 July.
  • workers in construction, manufacturing and related industries are due to receive their pay rises as of 1 September; and
  • those working in the areas of accommodation, food services, the arts, recreation, aviation, retail, tourism and hospitality have to wait until next year to receive theirs, on 1 February 2021.

ACTU SecretarySally McManus said in reaction to the FWC’s ruling:

This is a very modest increase and it is disappointing that several awards will not see any increase until November or February.

The most important thing the country needs is people with money to spend and the confidence to spend it. This is how the hospitality, retail and tourism industries will get back on their feet.

Industrial Relations Minister Christian Porter defended the FWC’s decision to stagger the pay rises as a means to ease the economy out of the pandemic-resultant recession.

Porter said about the FWC made recommendations:

This is an annual wage review unlike any we have seen before and is one which reflects the unique circumstances facing the Australian economy.

By staggering the implementation of the increase across industry sectors, the FWC has engaged in an attempt to ease the impost of wage rises on industry sectors most deeply affected by the pandemic. 

This provides at least some breathing space as these industries work hard to get back on their feet, rebuild their businesses and re-hire staff who have lost jobs or suffered reduced hours as a consequence of the pandemic.

However, unions under the ACTU’s governance were quick to follow suit with reactions similar in tone to that of McManus.

Health Services Union (HSU) Secretary Lloyd Williams pointed out:

Our members include some of Australia’s lowest-paid workers – aged care workers, disability support workers, hospital cleaners and kitchen staff. Throughout the COVID-19 pandemic, these largely Award-reliant workers have turned up to work to care for us and to keep us safe. They have received applause and thanks from every Australian, from the Prime Minister down. But applause and thanks don’t pay the bills.

The words of Burke, McManus and others within the union movement bear one consistent message: while Morrison and Frydenberg talk up a good game about inspiring the Australian economy, they have failed to deliver on the basis of a lack of foresight and vision. Instead, they see those in government not taking extraordinary steps to do so, in a year where unprecedented events seem commonplace.

Would advocating harder for higher wage rises, the delaying of penalty rates cuts and the unifying of dates to make the wage rises effective help inspire the economy? Since lifting Australia out of recession exists as a goal for both sides of the nation’s political divide, it should also be noted that the spirit of cooperation and bipartisanship that existed at the start of the pandemic now appears to have disappeared.

William Olson is a freelance journalist and hospitality professional. You can follow William on Twitter @DeadSexyWaiter.

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