Chris Ketter (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

Last week, we learnt that Australia has posted 104 successive quarters of economic growth. This should be a cause for celebration for our nation. It is a world record, after all, and we've overtaken the Netherlands in this regard. But if you look at who is benefiting from this economic growth, unfortunately the story is not quite so rosy. The reality is that this growth is underpinned by record corporate profits, not by a real rise in wage growth. In fact, wages growth is at record lows. In addition to this, household debt is at record highs, union membership is dwindling, and the scope of enterprise bargaining agreements are being dramatically reduced. People are losing their right to a fair day's pay.

The National Accounts for June have shown that economic growth is below two per cent, putting Australia's annual growth performance below that of Canada, the USA, New Zealand and the OECD. We also saw that average wages fell by 0.1 per cent, meaning living standards are continuing to slip. But at the same time, we see statements by the Reserve Bank governor, Dr Philip Lowe, that the laws of supply and demand still work and will lead to wages growth, and I agree. But that's not the full story. Bargaining power matters.

Dr Lowe also made statements in June saying that workers should not fear robots or foreigners. He downplayed fears of a lack of full-time jobs and said that the debate between full-time work and part-time work was a bit old-fashioned. He argued that, if people valued job security and took their case to their bosses, wage rises would follow.

The Reserve Bank Governor is not the only person commenting on low wages growth. The Treasurer in March said:

The biggest challenge we have is to ensure what Australians are earning every week is increasing. Our wage price index has been flat for some period of time now, and increasing what Australians earn, whether it's wage earners or small businesses, is what I think is the big challenge now.

So, after years of concerns about wage growth, begrudgingly the Treasurer has finally accepted the argument that Labor has been making for a very long time—that low wage growth is the biggest risk that threatens economic growth. But the government didn't take the action that it should have in response and follow Labor's lead and reverse the penalty rates cut—a wage cut at a time when living standards are falling. The Turnbull government is also committed to the company tax cuts and an increase in the Medicare levy for low- and middle-income earners, while removing the high-income budget repair levy.

While the Treasurer laments low wage growth, he doesn't have the policies to remedy the problem. They are all the wrong budget priorities. When it comes to low wage growth, the issues do run into the industrial bargaining space. A growing economy doesn't automatically mean that everyone enjoys the benefits, as I said previously. Bargaining power matters. When it comes to industrial relations and bargaining, I pay tribute to my Senate colleague Senator Gavin Marshall for his work in leading the Senate Education and Employment References Committee inquiry into corporate avoidance of the Fair Work Act. The report makes it clear that workers face problems when it comes to wage rises. The report found:

… a concerning trend of workers being unable to hold onto existing conditions under the current industrial system, let alone being in a position to seek higher wages in their own interests or that of the national economy.

I think this goes directly to the issue that Dr Lowe has highlighted—that the industrial relations system is getting in the way of that.

As found in this inquiry, the true problems faced by many Australian workers are multifaceted: casualisation, sham contracting, labour hire, noncompliance with Australia's industrial relations laws, new levels of union demonisation, falling wages, cuts to penalty rates and the gig economy. I can't go through all the findings and recommendations in this education and employment report, but I will mention a few to show the problems Australian workers are facing when it comes to wage rises. The first finding in the report is about the bargaining process. The committee report states:

It is the committee's view that collective bargaining should be open to workers and corporations at the level which allows the workers to negotiate directly with the point of economic power in the same way that Exxon "bargained" with contractors, playing them off against each other, workers and their representatives should be able to bargain in a real sense with the purchaser of their labour. In commerce a range of labour supply relationships exist beyond traditional direct employment. Outsourcing with competitive contracting gives rise to serious and potentially negative consequences for workers' wages and conditions and the FWA should be amended to expand the scope of collective bargaining coverage and corporate responsibility to workers beyond direct employees.

I turn to the recommendations. There was a recommendation to amend the act to prevent the commission from terminating an agreement, which imposes an unnatural end to the bargaining process. There were recommendations going to labour hire companies being required to become licensed and better regulated. Labour hire should be used appropriately to help top up workforce capacity where there are surges. It should not be used to casualise and drive down the wages of a workforce. Other recommendations went to allowing unions greater access to worksites to better monitor any deviations from lawful practices.

There also needs to be bigger penalties for wage theft, including the superannuation guarantee. I chaired the economics references inquiry into the superannuation guarantee and was deeply troubled by the ease with which underpayment can occur. People are entitled to the wages that they worked for. There should be no doubt that people are paid appropriately. This should include a reverse onus of proof on employers to prove that they've paid their staff correctly.

There are further findings in the areas of improving the information given to employees before taking on a new job and to display infringement notices publicly where businesses have been underpaying staff more than once. Migrant workers were also another well-known vulnerable group, and the report quite correctly made recommendations to address the exploitation going on in this area.

Another area I want to go into is sham contracting, where people are being effectively forced to take out ABNs as a way of securing work without the proper protections, rates of pay, superannuation, leave, redundancy, et cetera that they would otherwise be entitled to. Sham contracting should be unacceptable in today's world. The final issue to mention is the gig economy, and the need to make sure that legislation is updated to reflect these new developments, to ensure that workers in this industry have the proper pay, conditions and protections.

It's deeply concerning that the Fair Work Act is letting Australians down in so many areas. After participating in this inquiry, it's easy to see why economic growth isn't translating into wage growth. The transmission system—the enterprise bargaining system—is broken, and needs to be fixed. As Senator Marshall has stated, this report probably won't completely repair the system. A future Labor government has to have a much closer look at the act.

I'm heartened by recent announcements that the rest of the Labor leadership understands this problem. For instance, Labor is concerned there's been a sharp increase in the number of enterprise agreements that have been terminated over the past two years, with workers being thrown back onto awards. We see reductions in their wages, conditions and bargaining power. That's why it's been recently announced that, if elected, Labor will change the law. It will limit capacity to terminate agreements in order to address the imbalance in bargaining power between workers, their unions and employers. The workplace relations laws must encourage bargaining on a level playing field in order to ensure benefits to workers and employers.

In summary, we have our economic leaders—people like Reserve Bank Governor Mr Lowe and the Treasurer—highlighting the risk of low-wage growth and what it might mean to our economy and our society, but it can't be assumed that economic growth will automatically translate to wage growth. Workers need decent bargaining power and a fair framework to work within. The transmission system, as I mentioned, which delivers a fair share of the fruits of economic growth, is currently broken. As outlined in the recent Senate report and the policies that Labor has announced, there is a need to fix this system so that proper wage growth can be restored, and we see the inclusive prosperity that Labor has always championed. I'll finish with another quote from the report that clearly summarises the need for change and Labor's commitment to a fair economy for all.

It's an inescapable fact that the world the FWA was designed to implement is rapidly changing. Policymakers have not kept pace with this change. Noting the need for considerable improvements to our industrial system, the committee urges policymakers to bear in mind that labour, economic growth and national prosperity have one goal: ensuring a decent standard of living for all Australians.