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Alarming rise in labour on-costs



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MEDIA RELEASE SENATOR FRED CHANEY LEADER OF THE OPPOSITION IN THE SENATE SHADOW MINISTER FOR INDUSTRIAL REIOXTIONS

ALARMING RISE IN LABOUR ON-COSTS

Today's ABS survey on major labour reveals an alarming rise in non-wage costs.

On a per-employee basis, superannuation contributions, pay-roll tax, fringe benefits tax and workers compensation rose by 18 per cent between 1985-86 and 1986-87. This was almost double the increase in wages and salaries.

The most dramatic rise was in employer superannuation contributions which escalated to a total of $2.5 billion; up 23% on the previous year. Superannuation costs per employee covered rose by 19 per cent or by more than $300 per year, to a total of

$2040.

And we can be fairly certain that this rate of increase has not abated. The budget predicts a further substantial spread of award based occupational superannuation benefits this year.

The survey bears out fears that small business is being hit hardest by increases in on-costs. For small businesses employing fewer than 10 employees, on-costs accounted for 7.2% of major labour costs in 1986-87, compared with 6.1% in 1985-86. Their total superannuation costs increased by 31% while the cost of

superannuation per employee covered rose by a huge 47%.

It is very difficult to see how Australian business can become more competitive when, as well as having to pay wage increases unrelated to the capacity of enterprises to pay, it is required to pay higher employment taxes and to make increased

superannuation payments flowing from the superannuation- productivity deal.

Today's ABS figures account for only around 90 per cent of all labour costs. Apparently we will have to wait a few more months to see what employers have to pay all up.

’commonwealth parliamentary library \ c. 1. s. A

92/88

costs in the private sector

CANBERRA 25 August 1988

Contact: Keith Kessell (062) 77 3170