13 reasons why voting for Liberal or Nationals candidates on 18 May 2019 may not be the best choice you could make

The McKell Institute, April 2019, Fork in the Road: The impact of the two major parties’ penalty rate policies in the 2019 Federal Election:

Key National Findings

Finding 1: Throughout the three year period of the forthcoming 46th parliament, workers will collectively receive $2.87 billion less in penalty rate pay under a re-elected Coalition Government than a Labor Government, when factoring in each party’s policy preferences.

Finding 2: Nationally, workers in the fast food industry are expected to receive $303.8 million less in penalty rate pay under a re-elected Coalition Government than under a Labor Government over the life of the forthcoming parliament.

Finding 3: Nationally, workers in the hospitality industry are expected to receive $837.15 million less in penalty rate pay under a re-elected Coalition Government than under a Labor Government over the life of the forthcoming parliament.

Finding 4: Nationally, workers in the retail industry are expected to receive $1.64 billion less in penalty rate pay under a re-elected Coalition Government than under a Labor Government over the life of the forthcoming parliament.

Finding 5: Nationally, workers in the pharmacy industry are expected to receive $84.86 million less in penalty rate pay under a re-elected Coalition Government than under a Labor Government over the life of the forthcoming parliament.

Finding 6: Over the life of the forthcoming parliament, workers in Queensland are collectively expected to receive $573.7 million less in penalty rate pay under a re-elected Coalition Government’s than under a Labor Government.

Finding 7: Over the life of the forthcoming parliament, workers in New South Wales are expected to receive $899.26 million less in penalty rate pay under a re-elected Coalition Government than under a Labor Government.

Finding 8: Over the life of the forthcoming parliament, workers in the ACT are expected to receive $45.69 million less in penalty rate pay under a re-elected Coalition Government than under a Labor Government.

Finding 9: Over the life of the forthcoming parliament, workers in Victoria are expected to receive $750.74 million less in penalty rate pay under a re-elected Coalition Government than under a Labor Government.

Finding 10: Over the life of the forthcoming parliament, workers in Tasmania are expected to receive $65.02 million less in penalty rate pay under a re-elected Coalition Government than under a Labor Government.

Finding 11: Over the life of the forthcoming parliament, workers in South Australia are expected to receive $209.65 million less in penalty rate pay under a re-elected Coalition Government than under a Labor Government.

Finding 12: Over the life of the forthcoming parliament, workers in Western Australia are expected to receive $299.52 million less in penalty rate pay under a re-elected Coalition Government than under a Labor Government.

Finding 13: Over the life of the forthcoming parliament, workers in Northern Territory are expected to receive $23.56 million less in penalty rate pay under a re-elected Coalition Government than under a Labor Government.

If as an ordinary worker you feel like you have been financially marching backwards for the last five and a half years then you probably have

“Backing business generates higher wages, jobs & growth.”  [Australian Treasurer & Liberal MP for Kooyong Josh Frydenberg, Twitter, 8 March 2019]

Such a confident quote from a Coalition Treasurer in campaign mode - but is it true?

According to the Dept. of Prime Minister & Cabinet/ASIC at the end of the period 30 July 2013 to 31 June 2014, there were est.2.6 million actively trading businesses in Australia and, according to the ABS by the end of  2017-18 there were 2.3 million actively trading businesses in the market sector in Australia.

Despite the Morrison Government alleging that by November 2018 it had created 1.2 million more jobs since September 2013, it's easy enough to see that in January 2019 the seasonally adjusted unemployment rate was only 0.6% lower than it was when the Abbott-Turnbull-Morrison Coalition Government came to power in September 2013.

Additionally, it would appear that the ratio of unemployed persons to job vacancies in late 2013 was est. 20 unemployed individuals for very 1 job vacancy and by December 2018 this stood at an est. 15.57 unemployed individuals for every 1 job vacancy.

So what about wages growth?

The Global Financial Crisis ran from 2007 to 2008 and Australia came through this crisis relatively unscathed.

So with little structural damage to our financial institutions or the industry & business sectors, the national economy should be chugging along nicely.

By now ordinary workers should be reaping the rewards for their productivity - as labour input to market sector multifactor productivity increased by 3.0% overall on quality adjusted hours worked basis in 2017-18 (while capital input only grew by 2.0%).

The biggest labor input increases occurred in Administrative and Support Services (8.2%), Manufacturing (3.8%), Accommodation and Food Services (3.7%), and Professional, Scientific and Technical Services (3.7%).

However, this is what each Australian's nominal slice of the economic pie looked like by December 2018......

According to the Australian Bureau of Statistics (ABS) in the December Quarter 2018; Compensation of employees increased by 0.9% nationally. 

In the Australian Capital Territory  the compensation increase was 2.1%, in Tasmania 1.6%, Queensland 1.5%, Victoria 1.4%, New South Wales 0.7%, and South Australia 0.1%. However compensation growth went backwards in Western Australia at -0.2% and Northern Territory -0.7%.

Also according to the ABS; The Consumer Price Index (CPI) rose 0.5 per cent in the December quarter 2018.  This followed a rise of 0.4 per cent in the September quarter, a rise of 0.4% in the June quarter and a 0.4% rise in the March quarter 2018.

It doesn't take a genius to see that nationally the effect of that December national compensation increase was actually 0.9% minus 0.5% CPI equalling 0.4% when it came to how far those few dollars in wage increase would stretch the weekly pay packet.

Why is low wages growth occurring? Well according to the Minister for Finance and the Public Service & Liberal Senator for Western Australia Mathias Cormann it is deliberate Morrison Government policy to suppress wages growth.

Low wage growth is no accident. Watch @MathiasCormann confirm that. pic.twitter.com/z8fGGCO52Z

— Australian Unions (@unionsaustralia) March 8, 2019

The result of this ongoing wages suppression? A continuation of the downward progression of disposable income and rising household debt, as illustrated in this graph from 2015 onwards.

ABC News, 9 September 2018

BACKGROUND

 Business Insider, 4 March 2019:

The ABS on Monday (4 March) released its Business Indicators results for December 2018, which showed trend growth in company gross operating profits at a healthy 9.6 per cent over the year to the December quarter.

Seasonally adjusted, that figure was even higher, hitting double digits at 10.5 per cent.

The figures were boosted by a strong performance that quarter, with trend growth up by 0.9 of a percentage point on the September quarter, or by 0.8 of a percentage point when seasonally adjusted.

The New Daily, 7 March 2019:

Chief executives and chief financial officers don’t get bonuses for increasing their companies’ labour costs – so they try not to.

Chairpersons and boards are not clapped on their collective back by institutional investors for devoting a greater share of revenue to wages – so they don’t.

And the cumulative effect of those simple realities is now unavoidable: Years of real, take-home wages going backwards while corporate profits increased, have meant household consumption is stalling and taking the economy with it.

Yet such is the myopic nature of corporate focus, business leaders react with horror to the idea that employees need a bigger share of the pie.

The business lobby claims wage increases aren’t possible without productivity trade-offs – but that’s after the productivity increases of recent years going overwhelmingly to higher profits.

Quite simply, the key business lobby groups have little credibility. They claimed reducing penalty rates would increase employment – it didn’t. They claimed cutting company tax would increase wages: It hasn’t and it won’t.

Household consumption accounts for more than half of the economy. According to the ABS, and nicely reported by Greg Jericho with helpful graphs, real household disposable income per capita has fallen back to where it was in 2010.

“Average compensation per employee” grew by only 1.5 per cent in 2018 – an even worse result than the better-publicised ABS wages index.

It’s only population growth that’s providing what little retail sales and GDP growth we have….

The Fair Work Commission (FWC) increased the minimum wage by 3.5 per cent last July – against the arguments of the business lobby – and by 3.3 per cent in July 2017. 

That increase of 6.8 per cent barely registered on the various measures of wages growth.

The conundrum of business needing consumers to have income growth, but 

not wanting to pay workers more, is a little like the “Paradox of Thrift” – it makes sense for an individual in uncertain times to save and not spend as much, but if everyone does it, uncertain times turn into bad times.

As argued here previously, business is holding a very determined wages strike. 

Corporate leaders don’t need FWC permission to do it, they just have to hang together to keep a lid on wage rises. In the process, they’re shooting themselves in the foot.

For the Coalition government, the result is a record of economic failure.

On the subject of income, welfare support and spending

Will negative wage growth, the acute poverty of jobless people combined with the avarice of employers and punitive federal government policy intesect to create a perect storm which will see household spending fall this year?   

Current state of play......

ABC News, 23 February 2019:

Rather, Dr Lowe saw stagnant household incomes is a much bigger threat to consumer spending, and thus to the 60 per cent of the economy based on it.

"Aggregate household income used to grow at 6 per cent, it's growing sub-3," he told the MPs on the committee.

"That's a big difference, and you accumulate that over three or four years and income is 8, 10 or 12 per cent lower than it otherwise would have been.

"Many people borrowed assuming their incomes would grow at the old rate and they haven't.

"They're having more difficulty, they've got less free cash and so they can't spend, so this is why I've put so much emphasis on the need for a pick-up in wage growth."

Dr Lowe told the committee he has been using speeches to try and lift wage expectations, while the RBA has been keeping interest rates low and stable for an extended period of time to relieve the pressure on households.

The RBA governor said, while the strategy seems to be working — with unemployment down at 5 per cent and wage growth starting to pick up from recent lows — he could use a bit more help from the Fair Work Commission and employers.

Fair Work last year awarded a 3.5 per cent pay rise for those on the minimum wage and linked awards, and Dr Lowe said that was a "sensible and right policy" and a similar increase this year "makes a lot of sense".

"If workers get their normal long-run share of that [productivity increase] then their real wages should rise by 1 per cent a year," he said.

Financial Review,  7 February 2019:

Consumer anxiety has reached its highest level in three years, with households spending less on discretionary items as they worry about their finances and the future.

The National Australia Bank consumer anxiety index rose to 62 points in the December quarter, and close to 40 per cent of those surveyed said they had experienced financial hardship during the quarter – the highest level in two years.

Households said they had pulled back their spending on things like travel, eating out and entertainment due to heightened anxiety about their financial conditions.

The primary causes of anxiety through the December quarter were how to finance one's retirement and how to provide for one's family's future....

"What's happening here is you haven't got much wages growth, you're paying off utilities, you're paying off debt, and you're doing things that you have to do."

Mr Oster said after doing all those things, there wasn't much money left for households.

Anxiety about job security reached its highest level since 2016, and 50 per cent of homes in hardship found their financial position impacted by high utility bills.

The Guardian, 17 September 2018:

A proposal to increase Newstart allowance by $75 a week would lead to a boost in consumer spending, creating more than 10,000 jobs and lifting wages, a new report shows.

The report by Deloitte Access Economics, released on Monday morning, said the policy to increase the incomes of more than 700,000 people by $10.71 a day would cost the federal budget $3.3bn a year.

But a “prosperity dividend” would see the government collect an extra $1bn in taxes as a result of a stronger economy, and the proposal was also projected to create 12,000 extra jobs in 2020-21 and increase wages by 0.2%.

It comes amid debate about the rate of Newstart, which at $272.90 for a single person has not risen in real terms in more than two decades. It will increase by $2.20 this week as a result of indexation.

The Australian Council of Social Service (Acoss), business groups, unions and a former prime minister, John Howard, have all argued for an increase, but the government has so far dismissed those calls….

The bulk of the economic benefits from increasing the payment would go to the bottom 5% of Australian income earners, who would receive “six times the dollars going to the highest income quintile”. The “poorest of the poor” would receive 28 times the relative boost to their disposable incomes, than the top income quintile.

Regional areas “most in need of help” would be key winners from increased spending….

The current rate is the equivalent to living on $38.99 a day. The report said a single person who also receives the maximum rent assistance and the energy supplement would be living on about $49.24 a day.

Previous research has shown that those on Newstart live on as little as $17 a day after their housing expenses and bills.

ABC NEWS, 9 September 2018:

It may not have garnered the same attention as the surprisingly strong second-quarter GDP growth, but an equally striking fact in last week's national accounts was household savings had just hit a post-GFC low.

It is not a new phenomenon. The household saving ratio — or the ratio of households' net saving to disposable income — has been shrinking since 2014.

What makes the latest figure uncomfortable is that there is now little fat left to trim, and on current trends households will be spending more they earn.

The ability of the Australian economy to keep growing in the face of a number of challenges in recent years owes a fair bit to the savings so prudently built up after the sobering experience of the GFC.

As JP Morgan's Tom Kennedy points out, the persistent decline in savings since 2014 has been an important part of Australia's real GDP growth performance, helping offset some of the spending drag associated with record low wages growth and an unemployment rate that has yet to fire up wages.

While the correlation between savings and spending is far from perfect, Mr Kennedy has drilled down into the figures, and is worried.

Inequality writ large in the NSW hospitality industry as a company grows wealthy by denying a fair rate of pay to its workforce

Multimillionaire Justin Hemmes comes from a privileged background having inherited the bulk of his wealth rather than earned it independently of the family company.

Yet as CEO of M.R.V.L. Investments Pty Ltd since March 2015 at which point the Merivale portfolio was said to contain more than 50 restaurants, bars, pubs and hotels in Sydney, with an estimated value of more than $1 billion he kept the family company’s wages bill so low for est. 3,000 employees - lawfully so under a Howard Government Workchoices-era collective agreement - that words fail me.

Merivale.com, retrieved 22 January 2019:

Owned and run by the Hemmes family for over 60 years, Merivale began as an iconic fashion house started by John and Merivale Hemmes. Merivale’s fashionable beginnings were soon followed by a venture into hospitality, opening a Thai tea café within their Sydney CBD fashion building in 1970. From here, Merivale’s hospitality roots were firmly planted.

Merivale is now led by CEO Justin Hemmes, whose creativity and knack for pushing the boundaries has made Merivale what it is today. Hemmes has become a pioneer within the Australian hospitality industry, growing the ever-expanding Merivale portfolio to over 70 brands and venues.

Financial Review, 23 May 2018:

Prominent Sydney hotelier Justin Hemmes has ridden the property boom all the way to this year's Rich List.

Hemmes and his family have amassed a $951 million fortune via the ownership of 70 pubs, hotels, restaurants and venues in and around Sydney, including The Ivy on George Street in the heart of the CBD.

He joins the biggest group of Rich Listers, property magnates, who this year account for 51 of the 200 names. Hemmes also just misses being among the record 76 billionaires on the list.

ABC News, 12 November 2018:

The drinking and dining empire led by high-profile Sydney hotelier Justin Hemmes is facing a push to kill off a workplace agreement that some current and former staff say denies them weekend penalty rates……

A former Merivale staff member, Maddie Lucre, raised concerns about being denied weekend penalty rates.

Ms Lucre worked at the Coogee Pavilion from January 2016 until July this year. With the assistance of United Voice, where she works in an admin role, Ms Lucre made a claim against Merivale for the weekend and public holiday amounts she claimed was owed to her under the company's agreement.

She was offered $2,706.72, the amount she claimed she was owed, on the condition that she sign a non-disclosure agreement. No admissions of fault were made by Merivale.

"I know that if I keep my mouth shut then no-one's going to find out about this," Ms Lucre told 7.30.

"Merivale has never been held to account for the fact that they are potentially underpaying people."

Financial Review, 21 January 2019:

Merivale is reviewing the viability of its business practices due to the axing of a WorkChoices-era enterprise agreement that gave it a significant commercial advantage in the industry.

The Fair Work Commission on Monday terminated Merivale's long-expired 2007 EA that allowed the hospitality giant to pay some 3000 workers below the award – more than 20 per cent below in some cases – by not applying overtime or full penalty rates for almost a decade.

The decision, which will not take effect until March to give Merivale time to transition to the award, is the result of United Voice taking action on behalf of two casuals who complained they were missing out on thousands of dollars a year……

Ms Tones, quoted by the union's submissions, said that 71 per cent of the company's workforce were casuals and 48 per cent worked on some form of visa.

Under the agreement, casuals were not paid full evening, weekend and public holiday rates or even overtime.

United Voice said one employee was paid $6 an hour less than the award on Saturdays, $10 an hour less on Sundays and $25 an hour less.

The Fair Work Commission having found on 21 January this year it would not be contrary to the public interest to terminate Merivale Employee Collective Agreement 2007 which had passed its nominal expiry date of 21 December 2012, Merivale now appears to be hinting that if it were to pay proper award rates to all its workforce it might have to close one or more businesses because it may not be able to afford a higher wages bill.

Again, words fail me.

NOTE: Justin Hemmes joined Twitter in March 2010 as @justinhemmes. Although he seems to have tired of the account sometime in 2014 it is still active and Twitter will allow civilised comments on this site.

State of Play: NSW North Coast Employment Opportunities

It's a brand new year but in regional New South Wales the old issues followed us past midnight on 31 December 2018.

Employment opportunities - where will our unemployed and underemployed people find a job in 2019 and beyond?

This is how the old year ended.....

NSW North Coast -Summary Data

List of summary data inNorth Coast
Data Name	Data Value
Unemployment Rate (15+):	6.1%
Unemployed (15+):	7,000
Total jobactive Caseload (15+):	10,643
Youth jobactive Caseload (15-24):	1,779
Mature Age jobactive Caseload (50+):	3,562

Download Summary Data in Excel

http://lmip.gov.au/default.aspx?LMIP/GainInsights/VacancyReport

The future appears to be a mixed bag for the NSW North Coast over the next twenty-four years. 

At which point the population may have reached somewhere in the vicinity of 400,000 residents.

However, it is expected there will be a drop in employment levels across Agriculture, Forestry & Fishing on the North Coast.

While Manufacturing only grows slightly in the Richmond-Tweed region and remains static same elsewhere.

Wholesale Trade remains steady in Tweed-Richmond with up to 300 new jobs, but is projected to go backwards in Coffs Harbour-Grafton over the next 24 years.

Retail Trade is predicted to grow modestly across the North Coast, with 900 new jobs predicted.

The Accommodation and Food Services sector is expected to show unspectacular growth right across the North Coast regions with only 900 additional jobs.

Administrative and Support Services employment is projected to rise - but only by 700 jobs up to 2023 and Public Administration & Safety are only expected to add 300 jobs over that same time period.

The Education sector is expected to grow by 700 jobs.

Information, Media & Telecommunications is expected to grow by 8.4% but it will take 24 years to achieve this small improvement on May 2018 figures and barely represents an est. 100 jobs overall.

Financial and Insurance sector employment opportunities are expected to diminish across the regions, but there are expected to be 500 more jobs in the Professional, Scientific & Technical Services.

Transport, Postal & Warehousing employment is predicted to remain at near present levels.

The Mining sector is not expected to grow past May 2018 levels on the North Coast from the Clarence Valley up to the NSW-Queensland border taking in all seven Northern Rivers local government areas.

However Construction employment is expected to grow by 15-16% by 2023 across the region. This represents est. 3,000 more jobs above May 2018 numbers.

Healthcare & Social Assistance is also predicted to grow by 3,900-4,000 available positions by 2023.

See the following Labour Market Information Portal links for further employment projections for regional Australia, including the NSW North Coast:

Employment projections for the five years to May 2023

Each year, the Department of Jobs and Small Business produces employment projections by industry, occupation, skill level and region for the following five-year period. These employment projections are designed to provide a guide to the future direction of the labour market, however, like all such exercises, they are subject to an inherent degree of uncertainty.

The 2018 employment projections are based on the forecasted and projected total employment growth rates published in the 2018-19 Budget, the Labour Force Survey (LFS) data (June 2018) for total employment, and the quarterly detailed LFS data (May 2018) for industry employment data.

2018 Industry Employment Projections Report (Word) (245.0KB)

Industry projections – five years to May 2023 (Excel) (49.3KB)

Occupation projections – five years to May 2023 (Excel) (80.4KB)

Skill Level projections – five years to May 2023 (Excel) (24.6KB)

Regional projections – interactive tool (Excel) (2.2MB)

Regional projections – five years to May 2023 (Excel) (921.3KB)

2018 Gender Employment Projections Report (Word) (116.7KB)

Just three months out from a state election and the NSW Berejiklian Government decides to introduce a new punative public housing policy guaranteed to upset a good many voters

In 2016 est. 37,715 people in New South Wales were recorded as homeless on Census Night.

The following year the NSW Berejiklian Coalition Government had a public housing stock total of 110,221 dwellings and an est. 60,000 people on the Dept. of Housing 2017 waiting list.

Below is the state government’s answer to the effects of decreasing public housing stock and federal Coalition Government cuts to public housing funding allocations to the states - introduce a new initiative under the 'Opportunity Pathways' program which will cut the housing waiting list by increasing eligibility restrictions, privatise service delivery to certain categories of public housing applicants and tenants in order to ensure that vulnerable individuals and families are discouraged from seeking housing assistance.

The Daily Telegraph, 7 December 2018, p.2:

Public housing applicants will have to get a job if they want a taxpayer-funded home under a tough new test to be introduced in NSW.

The state government is overhauling the public housing system by stopping residents who languish on welfare for decades feeling entitled to a cheap home, paid for by the taxpayer, for their entire life.

Currently less than a quarter of social housing tenants are in the workforce. There are about 55,000 people on the public housing waitlist in NSW, and under the new program they will be able to skip the queue if they agree to get a job.

But if they get into the home then fail to get a job or maintain work they will be booted from the property.

Once they are secure in a job they will then move into the private rental market and out of the welfare system.

Social Housing Minister Pru Goward said the program will “help break the cycle of disadvantage”.

“This is about equipping tenants with the skills they need to not only obtain a job, but keep it over the longer term and achieve their full potential,” she said.

“We also want to set to a clear expectation that social housing is not for life and, for those who can work, social housing should be used as a stepping stone to moving into the private rental market.” The new program will be trialled in Punchbowl and Towradgi, near Wollongong, for three years across 20 properties. Its success will be evaluated over this time and it’s likely the program will be expanded across the state.

Homes will be leased for six months at a time, with renewal dependent on the resident maintaining their job or education, such as TAFE, and meeting agreed goals within the plan.

NSW eTendering:

RFT ID FACS.18.30

RFT Type Expression of Interest for Specific Contracts

Published 23-Aug-2018

Closes 27-Sep-2018 2:00pm

Category (based on UNSPSC)
93140000 - Community and social services

Agency FACS Central Office

Tender Details

The NSW Department of Family and Community Services (FACS) is seeking Expressions of Interest (EOI) from non-government organisatons with the capability to deliver the Opportunity Pathways program.

Opportunity Pathways is designed for social housing tenants and their household members, approved social housing applicants and clients receiving Rent Choice subsidies who aspire and have the capacity to, with the appropriate support, gain, retain and increase employment.

The program is voluntary and uses a person-centred case management approach to provide wrap-around support and facilitate participant access to services to achieve economic and housing independence (where appropriate).

The objectives of the program are to:

assist participants to gain, retain or increase employment, by accessing supports and practical assistance, and by participating in education, training and work opportunities

encourage and support participants to positively exit social housing or Rent Choice subsidies to full housing independence, to reduce their reliance on governement assistance, where appropriate

Please refer to the Program Guidelines for further details.

Opportunity Pathways will run for three years and delivered across NSW in those locations where a need and service gaps are identified.

The program will be delivered by one or more providers following an EOI and Select Tender.

Location

NSW Regions: Far North Coast, Mid North Coast, New England, Central Coast, Hunter, Cumberland/Prospect, Nepean, Northern Sydney, Inner West, South East Sydney, South West Sydney, Central West, Orana/Far West, Riverina/Murray, Illawarra, Southern Highlands

Estimated Value

From $0.00 to $36,100,000.00

RFT Type

Expression of Interest for Specific Contracts - An invitation for Expression of Interest (EOI) for pre-registration of prospective tenderers for a specific work or service. Applicants are initially evaluated against published selection criteria, and those who best meet the required criteria are invited to Tender (as tender type Pre-Qualified/Invited). [my yellow highlighting]

As of June 2018 in NSW there were 200,564 people registered with Centrelink whose income was Newstart Allowance and, by September there were only est. 82,400 job vacancies available as the Internet Vacancy Index had been falling since April 2018. The number of job vacancies were still falling in October 2018 to 66,000 job vacancies.

Just three months out from a state election and it doesn't appear that the Berejiklian Cabinet or other Liberal and Nationals members of the NSW Parliament have thought this new policy through to its logical conclusion.