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Monday, 12 October 2015
Page: 7340

Senator URQUHART (TasmaniaDeputy Opposition Whip in the Senate) (17:08): In recent times, we have seen the Liberals lining up to attack Australian workers and their penalty rates. Mr Andrew Nikolic, Mr Wyatt Roy, Mr George Christensen, Senator Edwards and Senator Seselja are just a few of the slew of Liberals who have lined up to take a shot at dragging down the pay of some of Australia's poorest workers. We have also learnt in recent weeks that the transfer to a new leader has in no way quenched the Liberals' thirst for reducing the working conditions of ordinary Australians. Clearly, change at the top has not resulted in a change of direction when it comes to slashing wages for some of Australia's lowest paid workers.

Employment minister Senator Cash has said she wants the debate to be opened up again. Cabinet member Mr Josh Frydenberg said that penalty rates are costing jobs. And now Prime Minister Turnbull himself seems to have caved in to the pressure in his party by admitting that penalty rate cuts are likely.

Worse, Mr Turnbull has said that the job of the government is to persuade workers that they are not going to be worse off. Notice the key word here is 'persuade', not 'ensure'. Penalty rates are a key feature of Australian workplace arrangements in many industries. They recognise that those who are forced or who choose to work on weekends make a big sacrifice in terms of time with their family and friends. They help to keep the system fair and they help millions of Australians to make ends meet. The hard-working Australians who rely on penalty rates are among the lowest paid in the country. Without penalty rates, millions of Australians would be forced into poverty or forced to find work in another sector.

Like it or not, the Monday-to-Friday working week is still a key feature of our society and of our culture. When the Grand Final is held on a Tuesday, when people regularly get married on Wednesdays and when parliament sits on a Sunday, then you can talk to me about our seven-day-a-week economy. Until then, it is as plain as day that our weekends matter. And it is clear that the Liberal members' call to cut penalty rates on the basis of a supposed seven-day economy ring very hollow indeed.

Weekends are special and those who work on them should be adequately compensated. Those who work unsociable or long hours sacrifice a lot in terms of time with family and friends. Let us not forget that the people who rely on penalty rates already earn among the lowest wages in the country. At the minimum wage without penalty rates there is barely a dollar left over for many Australian workers. If penalty rates are ripped away by this government, hundreds of thousands of Australians will not be able to meet their basic living costs and many of them will be forced into serious debt just to survive.

According to the Australian Bureau of Statistics, the average weekly wage for retail workers was $553.70 a week in 2014. For workers in accommodation and food services, this figure was even lower at $519.20 a week. Without penalty rates, millions of workers in these industries simply will not be able to make ends meet. Perhaps it is easy for Liberal MPs and ministers in this place on a minimum of around $200,000 a year to forget what it is like living from pay cheque to pay cheque or, worse, from meal to meal. Many who work full time will be stretched to the limit.

Let us not forget that many people who rely on penalty rates do not work full-time. Whether they have children or other caring responsibilities or just are not able to secure full-time work, these people will be pushed to brink. It is important to remember that a huge number of Australians who rely on penalty rates to survive are students. Without penalty rates, without a liveable income, many would be faced with a simple but devastating choice: find a job that pays enough for survival or quit studying.

Given our high unemployment rate, the first option might very well be impossible. Education may be the thing that has to give. Clearly, this is not an outcome that we in this place want to encourage. Clearly, we need to encourage our brightest young minds to achieve the very greatest things they can for themselves and for our country and clearly, we do not want to starve their potential. Cabinet Minister Josh Frydenberg recently made the claim that penalty rates are costing jobs and that their removal would create a jobs boost. Quite frankly, this argument shows a very limited understanding of basic economic theory. Certainly, if penalty rates were removed there would be more money in employers' pockets. No one is disputing that. But the suggestion that this would lead to job creation completely ignores the demand side of the equation.

A basic reality of business is that job creation is driven by consumer demand for products and services. Only a foolish business owner would take on extra staff if there was no work for them to do. And demand is heavily impacted by how much money consumers are able to part with. There is absolutely no reason to think that removing penalty rates would magically increase consumer demand or create extra customers with more money.

In fact, a reduction in penalty rates is likely to have exactly the opposite effect, especially in regional communities. By slashing wages, you very effectively reduce disposable income. By reducing the take-home pay of as many as 4½ million Australians who rely on penalty rates, you would force a pretty serious hit on the total disposable income available to be spent on products and services. In areas where many people are reliant on penalty rates, a reduction in disposable income can only affect the ability of these individuals to spend money in their local communities. While they probably will not be able to cut back on the basics like food, rent and bills, the first thing to go would be discretionary spending at—you guessed it—local retail and hospitality outlets.

In fact, the McKell Institute has done some very interesting work on the economy-level impacts of cutting penalty rates. In a recent discussion paper, the institute found that even a partial abolition of penalty rates in the retail and hospitality sectors would see workers in rural New South Wales losing between $118 million and $220 million each year. This works out to be a hit to disposable income—and thus to local economies in rural New South Wales—in the order of between $53 million and $106 million every year. And now it seems the Turnbull government want to levy this pain on regional economies across the country.

Economists understand that solid wage growth is a hallmark of a healthy economy. Sadly, Australian wage growth has flatlined. Only one with a very feeble grasp of basic economics would respond to this problem by further slashing the income of millions of Australians. If Mr Turnbull could see past the ideology that drives his Liberal puppet masters, he would recognise that cutting penalty rates would be bad for workers, bad for business, bad for regional economies and bad for Australia as a whole because of the lack of income and disposable income at the forefront of the regional communities that rely on it to survive.