Turnbull Government, business and industry still out to suppress minimum wage

According to the Australian Treasury in November 2017;  

On a variety of measures, wage growth is low....

However, weaker labour productivity growth seems unlikely to be a cause of the current period of slow wage growth in Australia. Over the past five years, labour productivity in Australia has grown at around its 30-year average annual growth rate....

An examination of wage growth by employee characteristics using the Household Income and Labour Dynamics in Australia (HILDA) survey and administrative taxation data suggests that recent subdued wage growth has been experienced by the majority of employees, regardless of income or occupation.....

This is true across the States and Territories, across industries, and across both the public and private sectors. Real wage growth – wage growth relative to the increase in prices in the economy – has also been low.

The Reserve Bank of Australia suggests in its March Quarter 2017 Bulletin that there is"

...some tentative evidence that the relationship between wage growth and labour market conditions may have changed, and that this may help to explain recent low wage growth. Using job-level micro wage data, we also find that, since 2012, wage increases have been less frequent and wage growth outcomes have become much more similar across jobs.

In Australia a minimum wage is an employee’s base rate of pay for ordinary hours worked.

Being paid at the minimum wage rate means that a worker is paid the lowest hourly income for his/her labour that is legally allowable.

At the beginning of the 21st Century (January 2001) the national minimum wage was $10.53 per hour or $400.40 per 38 hour week (before tax).

The current national minimum wage is $18.29 per hour or $694.90 per 38 hour week (before tax) according to the Fair Work Commission.

That represents a rise of $7.76 an hour over the course of 17 years - the equivalent of 45 cents a year.

Not a spectacular hourly base wage growth by any measure.

In March 2018 the Australian Federation of Employers and Industries (AFEI), Australian Retailers Association, Restaurant & Catering Industrial (RCI), Australian Business Industrial and the NSW Business Chamber Ltd (along with eight other industry representatives) made initial submissions to the Fair Work Commission Annual Wage Review 2017-18.

It will come as no surprise that any decent rise in the minimum wage is being resisted in these submissions.

A number of business and industry representatives appear to believe that even raising the minimum wage hourly rate by as little as 34-35 cents is an onerous burden.

Frequent mention is made of the supposed part the businesses they represent play in national ‘jobs and growth’ and the risk wage increases allegedly pose.

A notion supported by the Turnbull Government’s own submission.

Couched in polite terms within their submissions is the last resort position of both the federal government and big business. 

It seems they are reluctantly willing to accept a minimum wage increase that doesn't rise by more than 1.9% (rate of inflation in December 2017) and definitely resist the idea of a rise that actually results in real wages growth.

However, there is another less polite aspect of the part businesses play in the lives of workers and it should be remembered when listening to business and industry representatives make their wage case during media appearances.

The Australian Government Fair Work Ombudsman’s 2018 media releases offer a window on that other aspect which includes a widespread contempt for both workers and the law.

 Media release, 16 March 2018:

Western Sydney campaign reveals high rates of unlawful workplaces

High rates of non-compliance uncovered by the Fair Work Ombudsman in Western Sydney have reinforced the importance of ensuring that Australia’s culturally and linguistically diverse communities have ready access to workplace information and advice.

The Fair Work Ombudsman today released the results of its proactive education and compliance campaign in the region, covering suburbs including Cabramatta, Guildford, Mt Druitt, Fairfield and Merrylands.

Almost two-thirds (64 per cent) of the 197 businesses audited by the Fair Work Ombudsman during the campaign were found to be non-compliant with workplace laws.

The campaign led to a total of $369,324 in unpaid wages and entitlements being recovered for 199 workers.

Sixty-four per cent of businesses were compliant with record-keeping and payslip requirements, while just 58 per cent were paying their employees correctly.

The campaign was initiated following an increase in the number of requests for assistance received from some parts of the region in previous years, despite an overall decrease across New South Wales in the same period.

As part of the campaign, Fair Work inspectors conducted site visits with a particular focus on Harris Park and Parramatta in response to intelligence received by the agency indicating potential non-compliance amongst restaurants in the area.

The suburbs are also home to a higher than average proportion of migrants, with both Harris Park (85 per cent) and Parramatta (74 per cent) at more than twice the national average of 30.2 per cent.

Acknowledging that new arrivals to Australia may have a limited awareness of Australian workplace laws, it was considered that businesses in the region would benefit from tailored support and education from the Fair Work Ombudsman.

Only two of the 23 businesses visited in these suburbs were found to be fully compliant – a non-compliance rate of 91 per cent.

Fair Work Ombudsman Natalie James says the non-compliance rates uncovered by the campaign are highly concerning and cannot be tolerated.

“Where possible, we seek to educate employers and employees about their workplace rights and obligations and equip them with the tools and information they need to ensure they are complying with the law,” Ms James said.

“This area has a large proportion of people from culturally and linguistically diverse backgrounds, who can find it more challenging to navigate that information or even know where to find it in the first place.

“When combined with a lack of familiarity with workplace laws, language barriers can present significant difficulties to employers seeking to understand and comply with their obligations. 

“The results of this campaign reaffirm the importance of my agency’s work in reaching out to culturally and linguistically diverse communities to raise awareness of the help we can provide.

“We are also making more and more of our tools and resources available in multiple languages, including our Anonymous Report function and the Record My Hours app,” Ms James said.

“Our website can also be viewed in 40 languages other than English with a simple click of the mouse with our new website translator.

“With the wealth of free information and resources available to help businesses understand their obligations, there are no excuses for breaching workplace laws.”

Overall, Fair Work inspectors issued 26 formal cautions, 20 infringement notices (on-the-spot fines) and 11 compliance notices to non-compliant businesses during the course of the campaign.

In one matter, a restaurant business was found to be paying its casual employees under an old award, resulting in a total underpayment of $10,444 to three employees. Fair Work inspectors issued the employer with a compliance notice, and the employees were fully back-paid in accordance with the notice.

Ms James said that non-compliant businesses were now on notice that future breaches could result in serious enforcement action.

“We are happy to work with businesses who require advice and support to meet their workplace obligations, and we will continue our work to ensure our materials are easily accessible to those that need them,” Ms James said.

“Indeed, we were pleased that the employers that we dealt with over the course of this campaign were cooperative and willing to engage with our inspectors, and that all contraventions were willingly rectified.

“We will continue to pursue new initiatives aimed at engaging with businesses in the region to ensure they have access to the help and information they need.”

Ms James reaffirmed however that her agency will not hesitate to take action where deliberate or repeated breaches of the law were identified.

“Employers who fail to put in place processes to ensure compliance expose themselves to enforcement action, including litigation in the most serious cases,” Ms James said.

Employers and employees seeking assistance can visit www.fairwork.gov.au or call the Fair Work Infoline on 13 13 94. An interpreter service is available on 13 14 50. 

Potential workplace breaches can be anonymously reported in 16 languages other than English using the Fair Work Ombudsman’s Anonymous Report function at www.fairwork.gov.au/inlanguageanonymousreport.

The Fair Work Ombudsman recently developed six videos in 16 languages other than English to help visa holders to understand their workplace rights. These and other in-language resources are available at www.fairwork.gov.au/languages.

The Fair Work Ombudsman’s Record My Hours app is aimed at tackling the persistent problem of underpayment of vulnerable workers by using geo-fencing technology to provide workers with a record of the time they spend at their workplace. The app is available in a number of different languages and can be downloaded from the App Store and Google Play.

Follow Fair Work Ombudsman Natalie James on Twitter @NatJamesFWO , the Fair Work Ombudsman @fairwork_gov_au  or find us on Facebook www.facebook.com/fairwork.gov.au .

Sign up to receive the Fair Work Ombudsman’s media releases direct to your email inbox at www.fairwork.gov.au/mediareleases.  

Read the Western Sydney Campaign report (PDF 445.5KB)  [my yellow highlighting]

Media Release, 5 March 2018:

The Fair Work Ombudsman’s latest Compliance Activity Report shows a workplace non-compliance rate of 76 per cent in the Caltex service network…..

The Fair Work Ombudsman commenced proceedings against the former operator of the Caltex Five Dock service station in Sydney, Aulion Pty Ltd, and has also initiated proceedings against Abdul Wahid and Sons Pty Ltd, the former franchisee of a number of Caltex outlets in Sydney.

In both cases, the Fair Work Ombudsman alleges that the absence of accurate time and wage records prevented inspectors from completing audits and determining whether employees had received their lawful entitlements.

During the activity, the regulator issued nine infringement notices, 11 compliance notices and 16 formal cautions to non-compliant franchisees.

Inspectors also recovered a total of $9,329.85 in back-pay for 26 workers who were underpaid during a one-month assessment period.

Ms James said the agency believes the figure would be higher if underpayments could have been accurately calculated, but with so many deficiencies in the outlets’ records it is impossible to be sure of the true extent of the wage rip-offs. 

“There’s no question that if these findings indicate the norm in this network, and if these underpayments are replicated throughout the business month after month, we are quickly looking at millions of dollars of underpayments over the course of a few years,” Ms James said…..

Caltex Compliance Activity Report  (PDF 650.5KB)

Media Release, 2 March 2018:

The Fair Work Ombudsman has commenced legal action against the former franchisee of a 7-Eleven retail outlet in the Melbourne CBD for allegedly exploiting three international students through a cash-back scheme.

Facing Court are Xia Jing Qi Pty Ltd, which operated a 7-Eleven retail store on William Street until March 2017, and the store’s former manager, Ai Ling “Irene” Lin.

It is alleged that after 7-Eleven head office set up a high-tech payroll system in 2016 aimed at ensuring employees were paid lawful minimum rates, the company and Ms Lin tried to disguise underpayments of three employees by requiring them to pay back thousands of dollars in wages.  

The three employees were Chinese students, aged between 21 and 24, who were in Australia on student visas. Ms Lin, from Taiwan, was also in Australia on a student visa…..

Media Release, 27 Feb 2018:

The Fair Work Ombudsman has brought proceedings relating to redundancy entitlements, in a new legal action against services company Spotless Services Australia Limited for allegedly contravening workplace laws when it terminated the employment of three workers at Perth International Airport.

Media Release, 26 Feb 2018:

The operator of a Degani café in Melbourne’s north-east is facing Court after he allegedly used false records to conceal more than $12,000 in underpayments of staff, including teenagers and overseas workers.

Media Release, 21 Feb 2018:

The operators of a Melbourne restaurant have been hit with nearly $200,000 in penalties, after a Judge ruled they deliberately underpaid workers.

Media Release, 20 Feb 2018

A Perth security company has been penalised in Court for underpaying its guards more than $200,000, with a Judge saying the company’s claim that it thought overpaying in relation to minimum rates would “counteract” other rates of pay was a “lame excuse”.

Media Release, 16 Feb 2018:

The operator of a number of massage parlours in Adelaide who said he was “too busy and lazy” to keep proper records has been penalised for contraventions of record-keeping and pay slip laws, following legal action by the Fair Work Ombudsman.

Media Release, 15 Feb 2018:

The Fair Work Ombudsman has commenced legal action against a Bundaberg-based transport company for allegedly underpaying an employee more than $11,000 over a period of just nine months.

Media Release, 14 Feb 2018:

Cleaning contractors at 90 per cent of Woolworths’ Tasmanian supermarket sites were not complying with workplace laws, a Fair Work Ombudsman Inquiry has found.

Media Release, 13 Feb 2018:

Michael Patrick Pulis, a business operator who told his employee to “seriously, f**k off…” when the worker asked when he would receive money owed to him, has been penalised $21,500.

Judge Grant Riethmuller also penalised Mr Pulis’ company, Pulis Plumbing Pty Ltd, a further $100,000 after a plumber’s labourer, who was 20 years old at the time, was underpaid by $26,882 over just three months.

Judge Riethmuller described the conduct as “outrageous exploitation of a young person”, adding that the behaviour was “such to arouse much emotion” and “nothing short of avarice”.

The worker was underpaid when he was employed by Pulis Plumbing to perform work in the Melbourne, Geelong and Bendigoareas between September and December, 2014.

Media Release, 8 Feb 2018:

A Northern Territory refuge for women and children victims of domestic violence has back-paid 11 employees a total of more than $50,000, after intervention by the Fair Work Ombudsman.

Media Release, 6 Feb 2018:

The operator of a remote Northern Territory homestead is facing major penalties after underpaying 17 employees more than $23,000.

Media Release, 24 Jan 2018:

A sushi outlet operator and an accountant have been penalised almost $200,000 for their involvement in an unlawful internship program that exploited young overseas workers.

Media Release, 22 Jan 2018:

A Brisbane labour hire business will face court for allegedly underpaying 10 employees more than $14,000 through an unlawful unpaid work experience program.

Media Release, 17 Jan 2018:

Ten truck drivers who worked for an Adelaide transport company have been back-paid a total of $374,000 following successful legal action by the Fair Work Ombudsman.

Media Release, 16 Jan 2018:

The former manager of an Oliver Brown chocolate café outlet on the Gold Coast who was ‘seeing what he could get away with’ when he exploited overseas workers has been penalised $27,200.

Media Release, 12 Jan 2018:

The Fair Work Ombudsman recently assisted workers at four businesses in suburbs south east of Melbourne to recover almost $50,000 in unpaid wages and entitlements.

Media Release, 9 Jan 2018:

A Judge has penalised a repeat-offender Melbourne childcare operator $85,000 for her latest staff underpayments, saying she required a “sharp lesson” to make her appreciate her legal obligations.

Then there is the naked exploitation outlined in the November 2017 UNSW-UTS study, WAGE THEFT IN AUSTRALIA: Findings of the National Temporary Migrant Work Survey:

A substantial proportion of international students, backpackers and other temporary migrants were paid around half the legal minimum wage in Australia…..

Underpayment was widespread across numerous industries but was especially prevalent in food services, and especially severe in fruit and vegetable picking.

Two in five participants (38%) had their lowest paid job in cafes, restaurants and takeaway shops. This was a far greater proportion than for any other type of job….

Large-scale wage theft was prevalent across a range of industries, but the worst paid jobs were in fruit- and vegetable-picking and farm work….

The study confirms that wage theft is endemic among international students, backpackers and other temporary migrants in Australia. For a substantial number of temporary migrants, it is also severe.

Besides wages theft, employers have also developed a penchant for pocketing workers superannuation.

News.com.au, 30 August 2017:

 …it turns out that Australia’s compulsorary superannuation system has a great big hole in it — one worth $17 billion.

That’s how much super employers have dodged paying in the past eight years, according to new figures released by the ATO this week.

The ATO analysis found that employees had likely missed out on $2.85 billion of their super guarantee payments during the 2014/15 financial year, because employers dodged their obligations, with small business owners among the worst offenders.

FAIR GO 101: It's Time To Change The Rules

Big business groups are already out attacking out our #ChangeTheRules campaign.

RT if you think workers need more secure jobs and a wage rise. #auspol pic.twitter.com/NPNIwAku86

— Australian Unions (@unionsaustralia) March 11, 2018

Australian workplaces still hostile territory for women

“When asked about a range of job attributes, women placed most value on having a job where they would be treated with respect (80%), where their job was secure (80%), where the job paid well (65%), was interesting (64%) and offered the flexibility they might need (62%). The majority of women viewed their job as being useful to society (69%) and felt that their job allowed them to ‘help others’ (73%). Two in five working women (43%) said they felt stressed at work, with it more likely being an issue for younger women, those still in education, and those in lower paid or casual roles. One in five women (20%) said they felt isolated at work, particularly those self-employed and working at home. Two-thirds of women said they received paid sick (67%) and annual leave (65%). Fewer received paid parental leave (42%) and paid carers leave (43%), and one in five women were unaware whether or not they received these entitlements at work.” 

[Marian Baird et al, 2018, Women and the Future of Work: Report1of The Australian Women’s Working Futures Project, p.4]

University of Sydney, News and Opinion, Significant gaps between working women's career goals and reality, 6 March 2018:

First study to examine women and future of work

Australian workplaces are not ready to meet young women's career aspirations or support their future success, according to a new national report by University of Sydney researchers.

“We are talking more about robots than we are about women in the future of work debate – this must change,” said co-author of the report, Professor Rae Cooper.

Launched today, the Women and the Future of Work report reveals the gaps and traps between young working women’s aspirations and their current working realities.

“There are significant gaps in job security, respect, access to flexibility and training,” said Dr Elizabeth Hill, co-author of the report.

“Government, businesses and industry need to step up and take action so that our highly educated and highly skilled young women are central to the future of work.”

The team of researchers from the University of Sydney’s Women, Work & Leadership Research Group, surveyed more than 2000 working women aged 16 to 40, who were representative of the workforce nationally.

The report is the first of its kind and found that young women were generally not concerned about job loss as a result of automation and economic change.

“Almost two-thirds of the women we surveyed said they didn’t fear robots coming for their jobs in the future,” Professor Cooper said.

“Our national debate about the future of work is too often a hyper-masculinised, metallic version of work.

“For young women, their picture of the future workforce is quite different: they see themselves balancing family and work commitments, and having long, meaningful careers. For this to be a reality, we need mutually beneficial flexibility in all workplaces.”

Respect and access to flexibility critical for women

The survey found being treated with respect and having job security were critical to ensuring young women’s future careers.

Despite 90 percent of women identifying access to flexibility as important, only 16 percent strongly agreed that they have access to the flexibility they need.

“Young women workers are generally optimistic about work and ready to contribute,” Dr Hill said. “But they find themselves caught in gaps between what they need and what the workforce offers.”

The majority of working women report that developing the right skills and qualifications is important for success at work (92 percent). However, only 40 percent said they can access affordable training to equip them for better jobs.

“Public policy settings, while improving, remain inadequate,” Dr Hill said. “Projected growth in feminised, low-paid jobs in health care and social assistance suggests an urgent need for government action to ensure these jobs meet the criteria of decent work.

“Current trends toward fragmentation and the contracting out of employment are undermining many of the criteria of decent work, making this a pressing policy issue for gender equality in the future of work,” Dr Hill said.

More women than robots in future workplaces

The survey also indicated young women often feel ‘disrespected’ by senior colleagues and supervisors because of their gender. This was the case both for highly paid professionals and low‐paid workers.

Ten percent of respondents said they were experiencing sexual harassment in their current workplace. Some groups of women reported higher rates of harassment including:

* women currently studying (14 percent compared to 8 percent who are not studying)

* women living with a disability (18 percent compared to 9 percent not living with a disability)

* women born in Asia or culturally and linguistically diverse women (16 percent compared to 8 percent who are not culturally or linguistically diverse).

“Employers need to commit and act to create workplaces where women are respected and valued for their expertise,” Professor Cooper said.

“There will be more women than robots in the future of work. It’s time that households, government, businesses and employers listen to them.”

Dr Hill said: “We are urgently calling on the government to facilitate and implement a public policy framework that supports young women’s career aspirations.

“We need to work towards a future where women are valued in the workplace and for their work.”

The study was funded by the University of Sydney’s Sydney Research Excellence Initiative 2020. It was authored by the Co-Directors of the University’s Women, Work & Leadership Research Group, Professor Marian Baird and Professor Rae Cooper, with Dr Elizabeth Hill, Professor Ariadne Vromen and Professor Elspeth Probyn.

The data collection and analysis for this research focused on working 16-40 year old Australians, and was undertaken by Ipsos Australia. It was collected in September-November 2017, and includes: a nationally representative online survey of 2,100 women; a survey of 500 men; a booster survey of 50 Aboriginal and Torres Strait Islander women; and five in-person focus groups of working women.

Full report can be found here.

“At the time of study, women with the following characteristics were found as being less likely to be working (noting that the first of these characteristics may be age-related):

- Those who have only completed secondary school (70% compared to 86% of those who have completed tertiary education, for example);

- Those living at home with parents (71% compared to 84% of those living in their own home);

 - Women with disability (74% compared with 82% of those without disability);

- Culturally and Linguistically Diverse women (75% in comparison to 82% of women who are not Culturally and Linguistically Diverse); and

- Low-income earners (70% of those earning below $40,000 as opposed to 88% of those earning above $80,000, for example).”  

[Marian Baird et al, 2018, Women and the Future of Work: Report1of The Australian Women’s Working Futures Project, p.18]

So what does Australia's public debt look like in January 2018?

As of 5 January 2018 Australian Government public debt stood at an est. $515.6 billion at face value. Six months earlier this debt had stood at est. $500.9 billion. So government debt continues to grow.

This early January 2018 public debt breaks down as:

Treasury Bonds	$477,278m
Treasury Indexed Bonds	$34,897m
Treasury Notes	$3,500m
Other Securities	$6m

Australian Office of Financial Management, 5 January 2018:

Treasury Bonds are medium to long-term debt securities that carry an annual rate of interest fixed over the life of the security, payable semi-annually.

All Treasury Bonds are exempt from non-resident interest withholding tax (IWT).

These treasury bonds were first issued between January 2006 and September 2017, with interest repayments ranging from 1.75% to 5.75% per annum due throughout 2018 and, in all but two instances the years beyond up to 2047. It is likely that at least 50% of these bonds are held by foreign investors.

The Turnbull Government appears to be using reduced government spending by way of funding cuts to essential government services and ‘reformed’ welfare payments in order to manage a portion of this debt – the remainder possibly being serviced by further bond issuance.

Given the potential to retain a higher dollar amount of cash transfers for longer periods in government coffers if the Cashless Debit Card is universally introduced for welfare recipients under retirement age, then I rather suspect that future welfare recipients may be disproportionately servicing this debt if Turnbull & Co have their way.

And while considering that growing public debt, the sustained federal government assault on safety-net welfare since 2013 and the attack on penalty rates in 2017, readers miight like to consider this……

The Australian Parliament consists of 226 elected members sitting as MPs or senators.

Between them they are reported to own 524 properties and, in addition to their salaries and any additional remuneration for ministerial position or committee membership, they also receive generous parliamentary entitlements of which they freely avail themselves:

Federal politicians claimed more than $55 million in expenses over the second half of 2015, new documents have revealed.

Federal politicians claimed almost $49 million in expenses over the first half of 2016, new documents have revealed.

The Australian, 5 January 2018:

Australians have endured their longest period of falling living standards in more than a quarter of a century as growth in costs outstripped earnings for the fifth consecutive quarter, leaving households worse off than they were six years ago.

After allowing for inflation, taxes and interest costs, average household incomes dropped 1.6 per cent in the year to September, capping a sustained fall in ­living standards that has not been seen since the 1990-91 recession.

Economists say more than half the cost increases for households are being driven by electricity, rent, health, new housing and tobacco, while modest wage rises are being partially absorbed by workers being pushed into higher tax brackets……

After adjusting for living costs, interest and taxes, average earnings in the three months to September were 0.7 per cent lower than in the same period of 2011, which marked the peak of the ­resources boom.

Over the previous six years from 2005, households had seen an average improvement in their living standards of 17 per cent.

AMP chief economist Shane Oliver said the mid-year budget update delivered before Christmas provided only limited scope for tax cuts.

“To be anything more than ‘sandwich and milkshake’ tax cuts and still maintain a trajectory ­towards a budget surplus by 2020-21, they would have to be offset by spending savings elsewhere. That is where the politics kicks in and the government has had difficulty getting things through the Senate,” he said.

Dr Oliver said if the government was successful in getting the 0.5 per cent increase in the Medicare Levy through the Senate, it would offset the benefit of any tax cut. The Medicare Levy increase is scheduled to start on July 1 next year and increase personal taxes by $3.6 billion in its first year and $4.3bn in the second.

Although living standards stopped rising after 2011, the ­decline since the middle of 2016 is new and reflects both the fall in wage growth and an increase in tax payments.

The ABS Wage Price Index shows a 1.9 per cent rise last year, but this is measured before tax and records the average increase for each job. National accounts show that personal income tax collections are rising much faster than pre-tax wages, partly ­because more wage income is being pushed into higher tax brackets. They show a 4 per cent lift in taxes per capita over the year to September, absorbing 60 per cent of the increase in wage income per person, which rose only 1 per cent.

Much of the very strong ­employment growth in the past year has been in lower paying jobs in the services sector, which has reduced average incomes overall.