Page 783 - Week 03 - Tuesday, 21 March 2017

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Industrial relations—penalty rates

MR PETTERSSON: My question is to the Chief Minister. The ACT Labor government has invested significant effort and resources into strengthening and diversifying the Canberra economy, as well as ensuring that ACT workers have access to secure and well paid jobs across a range of sectors. Can the Chief Minister advise how the recent Fair Work Commission decision to cut penalty rates will affect Canberra workers?

MR BARR: I thank Mr Pettersson for his question. We are very pleased with the strength of the ACT labour market in recent times. We have worked very hard, in partnership with many in our community, to ensure that the ACT economy continues to grow and that we continue to see job creation.

I am pleased to advise the Assembly that the unemployment rate, at 3.8 per cent, has fallen from a peak of 5.1 per cent in October 2015 and that employment growth over the past 12 months was a solid 2.2 per cent. Nearly 4,600 extra jobs were created in Canberra. This compares to the national average increase of jobs growth at just 0.9 of one per cent. So jobs growth in the ACT has been more than double the national average in the last year.

There is no doubt that the cutting of penalty rates puts a number of these gains at risk. It is particularly bad for workers, but it is bad for our economy overall. Those workers in retail, in hospitality and in the pharmacy sector who are affected by the Fair Work Commission’s decision will see a big cut to their take home pay.

This leaves them facing two pretty terrible choices: either take this big hit to their standard of living or have to work considerable extra hours, that is, more time away from their family and friends to make up the difference.

This cut in penalty rates could cost hospitality and retail workers up to $77 a week in lost income. It will mean that many people will have to work even more just to make ends meet; so a big cut to your pay packet or longer hours just to earn the same pay. That is what the Fair Work decision means for Canberrans and for workers right across the country. That is why this government stands against those cuts.

MR PETTERSSON: How does reducing workers’ take-home pay by cutting penalty rates hurt the wider economy?

MR BARR: In the simplest possible terms, workers are consumers. Those hospitality, retail and pharmacy workers who are going to see a big hit to their take-home pay are the very same people who shop at Canberra’s local businesses and use our local services.

It is worth noting that household consumption is fully one quarter of all economic activity in the ACT. Nationally, it is almost 50 per cent of our GDP. Last year the territory’s households poured $16.6 billion into our economy through their spending. By cutting people’s spending power by cutting their pay, we are doing harm to the

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