Gavin Marshall (Victoria, Australian Labor Party) Share this | Hansard source

Well, that was a rather extraordinary contribution from Senator Reynolds, that the wish of the Senate to discuss inequality in all its forms and to get the Productivity Commission to review that on a regular basis is somehow left-wing ideological hubris or left-wing arrogance. I think people should look in the mirror when they make those allegations about simply wanting to discuss it. But, if the government simply wants to deny that there is income inequality or inequality in our community, I think they really do so at their peril.

I think that to run up some statistics to prove that there is no inequality in our system defies any sense of reality. You only have to talk to anyone in this country to know that they see inequality every day of their lives. They experience inequality every day of their lives. I do think it is very problematic for people in an incredibly privileged position like we are—who are probably in the top half of the top one per cent of all wage earners in this country—to simply, in here, pronounce judgements across the community that there is no inequality and this is all a political stunt by the Labor Party. Again, I think you do so at your peril. This is from the government who wanted to cut billions of dollars from the pensions.

Now, we know that people living on pensions struggle. There is certainly inequality in people relying on either pensions or other forms of welfare. There is inequality there. If the government had their way, they would have cut $2.4 billion from old-age pensions in one of their latest budget iterations. We know that people who don't own their own houses are being pushed further and further out into the outer suburbs of the big cities just so they can afford some of the cheaper rents. But, of course, with the cheaper rent comes higher transport costs and less access to a whole range of services which people need. That drives inequality in our community. Senator Reynolds made the startling observation that people on welfare receive more from the taxpayer than they pay in tax. Yeah, that's true: they're on welfare; it is actually self-evident. I don't know how that argument suggests that there is no inequality.

A decade ago, 600,000 working families relied on support from the government to bring their household income up to the poverty line—not above it; up to it. That was a decade ago. It's worse now. The taxpayers in these situations are actually subsidising crummy employers who provide crummy jobs. That is one of the things that we ought to be addressing. People who work in this country ought to be working for wages that can sustain them and allow them to live in reasonable means. If that's what Senator Reynolds describes as left-wing ideology, well, I'm guilty of that; I'm proud of that. We know that in this economy, right now, the wages share of GDP is going down. The profit share of GDP is going up. Not only is the wages share going down; wages themselves are either stagnant or in decline. It is so much so that the Governor of the Reserve Bank has said this is a major structural problem for our economy now. Yet, the government seems to think that everything's fine—that there is no income inequality.

This week, we have seen CBA executives not grant themselves some bonuses. Because they have been engaging in some criminal activity, they are not going to pay themselves some bonuses. From memory, a year's bonus was worth $2.3 million. There are some families in this country that will never earn that much in their lifetime—never. Yet, the government says, 'There's no income inequality in this country. Again, it's the politics of envy.' I think just those bonuses are obscene, but those bonuses are on top of wages of some $10 million a year. Wages at the top end have been increasing at a far higher rate than wages at the bottom end.

Post-war in this country, in the '50s and '60s, we actually had a narrowing of inequality in this country. We had good jobs. We had a fair day's pay for a fair day's work. We had good regulations. We had employers that respected the right to provide to their employees good-quality jobs, long-term jobs. But since the 70's, it has been going backwards, under not just conservative governments but also Labor governments, too. When we were in government, I wished we had done some more things that would have structurally addressed some of these problems.

Labour compensation, as a share of GDP just in the last two quarters, has reduced. In the year ending March, the total quarterly nominal GDP grew by over $31 billion. But just $3.1 billion of that, only 9.9 per cent, was reflected in higher wages compensation. In other words, of each dollar in new GDP produced in Australia over the past year, less than 10 cents found its way into increased labour compensation. That proportion was the smallest of any non-recession 12-month period in Australia's post-war history. The link between GDP expansion and workers' incomes has never been weaker. That's from research done from The Australia Institute and the Centre for Future Work. None of that academic work has been challenged.

On average, each hour of work in Australia's economy produces about $90 of value added. When adjusted for inflation, labour productivity has grown by almost 20 per cent over the last decade—a 20 per cent increase in productivity. Real wages, however, have grown only six per cent over the same period—less than one-third as fast as real labour productivity. With real labour productivity growing faster than real labour compensation, this implies that the share of produced output paid to labour must be declining—as night follows day. The labour share has declined by a cumulative 11 percentage points of GDP since the mid 1970s. The erosion of the labour share since the peak represents the redirection of about $200 billion of annual output from workers to other economic stakeholders. By far the major beneficiary of that redistribution has been the private corporate sector, which has increased its share of GDP by about 10 percentage points over the same period, reaching 24 per cent of GDP in the March quarter.

While we have those figures demonstrating my earlier comments that the profit share of GDP is increasing, the wages share of GDP is going backwards and we see employers taking advantage of the current industrial relations settings to drive wages down. I have seen and heard from workers, unions and employers how this is taking place. One of the most insidious ways it is taking place is simply the labour-hire, contracting-out scenario. A good example is a dispute that happened at Carlton & United Breweries in Victoria not so long ago. The company contracted out its maintenance workforce. It simply organised another company to contract for that work, at 65 per cent less wages, and awarded them the contract. Overnight, those workers, one of whom had worked at that company for 40 years, were simply left without a job. The company had a replacement workforce ready to go. That was done to drive down wages. I wish it were a lone example, but it is not.

We look at ExxonMobil, one of the biggest multinationals in the world. They had their offshore cleaning contractors and catering contractors, who go and clean the quarters on the oil rigs and the drilling platforms, simply contracted out. Exactly the same work still had to be done, but they simply changed the contractor to people who paid less. All those people were simply left without a job, and the people who were brought in to replace them were paid less. It was simply a way for that company to drive down wages and to put those savings in their corporate pocket—no regard for the devastation that that caused the individuals, no regard for having quality jobs.

Here we are in a situation where employers will come up to you proudly, as if it is a badge of honour, and say, 'We pay the award.' Well, just in case you didn't know, paying the award is the lowest legal minimum wage you are allowed to pay in this country. And that's a badge of honour? 'We pay the lowest legal wage we have to pay in this country,' and they see that as a badge of honour! Why many of them see it as a badge of honour is that a lot of their competitors aren't even paying the award. They pay below the award—illegally, but they do that. So the ones paying the award say, 'Well, we're paying the award; you should give us a medal for that.'

When we have award reliance increasing, and bargaining going backwards, which is the situation we're in now, when we have contracting-out and labour-hire arrangements being put in place simply so wages and conditions can be driven down every time a contract changes, we have a situation where work becomes precarious, insecure, the quality of the jobs is poorer and the wages and the remuneration that people get are less. That is what is happening in our economy at the moment. These are not just isolated instances. This is happening all over the place. It is broad. The framework that allows that to happen is the Fair Work Act. It is no longer fit for purpose and needs to be addressed.

We have a situation where noncompliance with legal obligations is rife. We've all heard of the 7-Eleven situation, of the Domino's situation and of many other companies that have exploited their workers—in ways that are sometimes actually legal but in many cases are not legal—and exploiting the existing environment to ensure that they can pay the least amount possible and workers are exploited. That needs to be addressed.

We have a noncompliance situation where the Workplace Ombudsman, who is the statutory body to deal with noncompliance, now has, I think, near 800 staff—I think it is a terrible indictment that there are 800 people—but they can't keep up with the workload. There seems to be an insatiable need for people to investigate noncompliance of the Fair Work Act and other industrial instruments. Unions used to play that role and they should again, but the Fair Work Act has made it nearly impossible for unions to be involved as they used to be when it comes to investigating noncompliance. As a result—and I make the direct correlation—of union membership being down and the lack of ability for unions to do time, wages and book inspections there has been an increase in noncompliance across the board.

I know government members celebrate the decline of union membership, but that is doing untold damage to the wages, conditions, the living standards and the benefits enjoyed by working people throughout this country. It needs to change, and denying and ignoring the fact that there is income inequality in this country is not a way to address that. That should be acknowledged, and the government ought to be working with us to look at ways to address that problem for the good of all Australians.

Debate adjourned.