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Monday, 7 March 2005
Page: 28

Senator MURRAY (2:27 PM) —My question is to the Minister representing the Minister for Employment and Workplace Relations, Senator Abetz. Is the minister aware that the Workplace Relations Act requires the commission to ensure a safety net of fair minimum wages and conditions of employment, having regard to both living standards and the desirability of high employment? Does the minister accept that living standards and employment have been rising, meaning the commission has been doing its job? Is the government concerned that any further minimum wage granted will continue to result in a low benefit to employees because of the withdrawal of welfare benefits and increased income tax? Why doesn’t the government do the obvious—raise the tax-free threshold considerably to deliver significant real disposable income increases to employees at no additional cost to business?

Senator ABETZ (Special Minister of State) —Senator Murray in his question has combined two portfolios and at the tail end of his question asked me about dealing with the tax-free threshold. I will pass on that aspect of the question, as I believe that that more appropriately fits into the jurisdiction of one of my ministerial colleagues. But, in relation to the safety net that does in fact fall into the portfolio area that I represent, I make the point that Australian workers on the federal minimum wage already earn the highest level of wages relative to average wages and in terms of purchasing power of all OECD countries. I think that is a very important statistic and consideration that we ought to keep in mind.

Senator Sherry —Is that a bad thing?

Senator ABETZ —Senator Sherry foolishly interjects and asks whether that is a bad thing. Of course it is not, because under the Howard government Australian workers are now receiving the highest wages ever at a time of high employment, at a time of low inflation and at the time of the lowest rate of industrial disputation ever in Australia’s history since records were first kept in I think about 1910. This is a very exciting statistic, and one that we are very proud of.

We believe the $26.60 wage increase that the ACTU are seeking would fuel wage pressures and seriously jeopardise the jobs of low-wage earners and reduce employment opportunities for the unemployed and low skilled. So it is a question of balancing it and getting it right. The important thing is that the Labor Party shadow in this area, who has in fact not asked any questions about this matter, is willing to acknowledge that we have the highest wage average in terms of purchasing power of any OECD country. When confronted with that statistic, acknowledged by the Labor Party, I would think that the argument being asserted by the ACTU for a substantial rise in the safety net wage does weaken somewhat. Their argument is not as strong as it otherwise might be. I am not sure that I can usefully add anything else to the matters raised by Senator Murray, but if there are any supplementary matters of course I would be willing to answer them.

Senator MURRAY —Mr President, I ask a supplementary question. Minister, is the government looking at ending the commission’s independent role in minimum wage setting? If it is, does it want to do so to ensure that it delivers lower wages for poorer Australians than they would get through the commission? Why is the government attacking wage increases for the poor and low paid but giving tax cuts and tax concessions to better-off and wealthy Australians?

Senator ABETZ (Special Minister of State) —I know that Senator Murray, in his heart of hearts, knows that what he asserted in his question is not correct. It is part of the political debate that goes on, where people seek to dress things up as being a bit more than they really are. We as a government have been very fair and, as Senator Murray would know, the first round of tax cuts were in fact given to those on lower incomes. The latest tax cuts were for those in the higher income brackets, who had been denied tax cuts for a considerable period of time.

Might I add that those tax cuts were supported in this place by the Australian Labor Party. In balancing up the ledger for the higher income earners, I do not think it is fair to say that we are seeking to give tax cuts to the better-off within the community and ignoring the low-income earners. In fact, the low-income earners got the first tax cuts, and we as a government have always been very conscious of low-income earners. (Time expired)