Bill Shorten: Australia in danger of having growth without prosperity
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”.
Bill Shorten says the most dangerous thing about economic insecurity is ‘it can be self-fulfilling’.