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Safety net decision of real Concern



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A U S T R A L I A N C H A M B E R Ο 1 C O M M HRC'I·: A N D I N D U S T R Y

MEDIA RELEASE 29 April 1998

SAFETY NET DECISION OF REAL CONCERN Au

Statement by Mark Paterson, Chief Executive

The increases that will be applied to awards are of real concern to employers. It is not a good decision. It will damage growth and employment prospects, and is made in the middle of the Asian crisis, which even the Commission acknowledged will slow down economic growth.

The decision is not one which makes employment the first priority, in an environment where there is over 8% unemployment. Nor will the increase promote workplace bargaining, when that is supposed to be the statutory priority. You do not promote workplace bargaining by increasing the award wage rates floor for agreements. Nor is there any offsetting productivity for the increases - it is money for nothing.

We don’t want to price the low paid out of jobs, yet there is a real danger that the low paid, low skilled, on lower award rates, who will get the highest increases, may have their interests severely damaged. The increase will severely impact on the services sector and similar sectors which pay few over-award payments, yet those sectors are supposed to be the source of new jobs. A $14 increase on an award rate of $550 is 2.5%, and it is an increase of about 3.9% in the Federal Minimum Wage.

These increases will have a differential impact, impacting on the services sector, the low skilled, small business, the rural sector, and the outlying States. These are all sectors where employees are more likely to be on exactly the award rate, and so the increases will be an actual increase in employer costs. Employers will have to fund that increase in costs through reducing other costs, cutting profits, not hiring new employees, or trying to increase sales and business, which is always difficult.

We have to learn in this country that award wage increases are not a particularly effective way to help the low paid.

There will no doubt be negative employment consequences as a result of this decision. For further comment contact:

Mark Paterson: 0419 215 037 (mobile) Reg Hamilton: (03) 9289 5289 (B/H (03) 9481 6959 (A/H)

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