Bill Shorten: Aus­tralia in dan­ger of hav­ing growth with­out pros­per­ity

The Guardian Australia - - Headlines - Katharine Mur­phy Po­lit­i­cal editor

The La­bor leader Bill Shorten says Aus­tralia is in dan­ger of hav­ing growth with­out pros­per­ity and that work­ers need a pay in­crease for the sake of the econ­omy.

Shorten used a speech to the John Curtin Re­search Cen­tre in Mel­bourne on Wednesday night to ar­gue there was a “creep­ing Amer­i­can­i­sa­tion of the labour market, where in­creases in work­place pro­duc­tiv­ity and ef­fi­ciency aren’t be­ing shared with the work­ers who make them pos­si­ble.”

He said over the past 10 years, real labour pro­duc­tiv­ity had grown by 20% while real wages had grown by 6%.

“Su­per­im­posed on this, we see rapid tech­no­log­i­cal change, re­defin­ing work, and off­shoring and ca­su­al­i­sa­tion, un­der­min­ing job se­cu­rity.”

Shorten said de­spite some im­prove­ments in the labour market data, more job cre­ation was not re­sult­ing in greater se­cu­rity or higher pay.

“That’s why, if you’re a busi­nes­sowner in re­tail, you’re start­ing to get ner­vous about Christ­mas sales, and the most dan­ger­ous thing about eco­nomic in­se­cu­rity is it can be in­fec­tious, fragility can be self-ful­fill­ing,” he said.

“Low wages growth erodes con­fi­dence through­out the econ­omy, not just in house­hold spend­ing. That’s why so many busi­nesses – not just in re­tail and hos­pi­tal­ity, re­alise they have a stake in lift­ing wages.

“For ev­ery­one’s sake – work­ing Aus­tralians need a pay rise.”

Shorten’s com­ments on Wednesday night fol­lowed a de­ci­sion by the fed­eral court ear­lier in the day to up­hold a cut to Sun­day penalty rates or­dered by the Fair Work Com­mis­sion.

United Voice and the Shop, Distribu­tive and Al­lied Em­ploy­ees As­so­ci­a­tion had chal­lenged FWC’s de­ci­sion to cut penalty rate cuts in awards cov­er­ing the hos­pi­tal­ity and re­tail sec­tors, which ap­plied from 1 July and will be phased in over three years, but the ap­peal was dis­missed.

Speak­ing at the National Press Club in Can­berra, the chief ex­ec­u­tive of the Busi­ness Coun­cil of Aus­tralia, Jen­nifer Wes­ta­cott, ac­knowl­edged wages growth was an is­sue and said “we do need to start think­ing about how the trans­fer sys­tem and the em­ploy­ment sys­tem, and, I think, the su­per­an­nu­a­tion sys­tem, are going to work to­gether”.

Wes­ta­cott said in the evolv­ing labour market, it could be en­vis­aged that a worker could earn in­come from “a bit of su­per, some part-time work and ... some kind of gov­ern­ment pay­ment.”

She said the Aus­tralian labour market, tax and trans­fer sys­tem was not geared for those kinds of em­ploy­ment and in­come pat­terns, and “the cliff edges for peo­ple where their ef­fec­tive mar­ginal tax rates are very high when they en­ter the work place is a de­ter­rent for work”.

Wes­ta­cott re­peated pre­vi­ous calls by the BCA to ex­am­ine the ad­e­quacy of un­em­ploy­ment ben­e­fits, but she ar­gued the fix on wages growth was “through pro­duc­tiv­ity”.

Shorten said the set of con­di­tions cur­rently man­i­fest­ing in the econ­omy was “un­prece­dented in both the speed of change and the com­plex­ity of its con­se­quences”.

He said the chal­lenge would re­quire co­op­er­a­tion be­tween politi­cians, busi­nesses and trade unions, but this was pos­si­ble be­cause the Re­serve Bank gover­nor, Philip Lowe, had spoken about a cri­sis in low pay, and ma­jor eco­nomic in­sti­tu­tions such as the In­ter­na­tional Mone­tary Fund and the World Bank were fo­cussed on the eco­nomic con­se­quences of in­come in­equal­ity.

Shorten said busi­ness un­der­stood “that mid­dle and low in­come Aus­tralians spend ev­ery dol­lar they earn – many bor­row to spend more than that”.

“So when fi­nan­cial pres­sures in­crease – with ris­ing prices, with in­creas­ing in­come taxes, with flat wages, with cuts to penalty rates – the con­se­quences don’t stop at the in­di­vid­ual fam­ily bud­get, they reach right through the econ­omy.”

Shorten said vot­ers would have a choice at the next elec­tion about restor­ing Sun­day penalty rates. A vote for the Lib­eral party would be “a vote for lower wages” while a vote for La­bor would be “a vote for higher wages”.

Pho­to­graph: Dean Lewins/ AAP

Bill Shorten says the most dan­ger­ous thing about eco­nomic in­se­cu­rity is ‘it can be self-ful­fill­ing’.

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