Page 1089 - Week 04 - Wednesday, 16 March 2005
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$1.04 a week worse off if the claim of $26.60 a week is granted. The financial help, they said in the Australian, provided by any increase in the minimum wage would be almost completely obliterated for thousands of families as governments claw back tax and welfare payments.
I know the answer will be that we will suddenly have an attack on the federal government welfare system. But my point here is to ask people to look at what these sorts of claims do to people and to ask whether they actually deliver the outcome that they are purported to do. We have a system of social security in place. We have a wages conciliation and arbitration award system and that is the vehicle where we need to apply some measure of sense.
Obviously, unions reject any criticism of their claims. The federal opposition, however—our federal colleagues on the hill whom we apparently have got to shun—
Mr Gentleman: Mr Smith?
MR MULCAHY: Yes, Mr Smith—Stephen Smith, your esteemed colleague and a competent member of parliament, I might say—said last night that he agreed that modelling showed many workers would be worse off under both the ACTU and the government submissions.
One of the other factors that need to be understood in these sorts of ambit claims and wage claims that are pursued is the flow-on effect. They have calculated in this same article that the ACTU’s claim, if granted in full, would result in payment by employers of around a $35 increase, once payroll tax, workers compensation and superannuation contributions were taken into account. So the impact flowing forward from the value-add on these sorts of wage claims, of course, is much more severe than is often recognised by those in the trade union movement and by my colleagues opposite, such as Mr Gentleman.
The Australian federal minimum wage is quite high by world standards. As a percentage of median earnings it is currently 59 per cent compared with 43 per cent in the UK and 40 per cent in Canada. Australia has the highest minimum wage of any country in the OECD as a proportion of the minimum wage. In supporting the ACTU’s claim, the Labor Party appears to ignore the resultant economic and social impacts of a high and increasing minimum wage. The tragedy is that the flow-on effect is rarely recognised. Those of us who were involved in business and industry around the nineties saw then what really happens when things get out of control. We saw the impact on the economy and we saw businesses suffering from high interest rates. High interest rates, whether we like it or not, are fuelled by wages spiralling, and so therefore it is an area of government economic policy that requires cautious management.
Mention was made by Mr Gentleman of the issue of casuals—how terrible it is that so many people have casual jobs these days and that this is a bad sign. I have worked in an industry that represented a quarter of a million Australian employees—a big part of the population. Many of those were women with children, or single parents, who wanted those casual hours. They worked in housekeeping jobs in hotels. Many of them were students who wanted to supplement their household income, to take pressure off their parents, to put themselves through university. It is a myth to say that people are opposed
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