Tonight I rise to speak about penalty rates. I know that is an area of interest to you, Acting Deputy President Gallacher. Penalty rates have been a feature of the industrial relations system in Australia for over 100 years. They are a time-honoured tradition, and while I realise that they are not unique to Australia, they do reflect our egalitarian value of a fair go for all—particularly for our most vulnerable, highly casualised workers. But, of course, now they are under threat.
The industrial umpire, the Fair Work Commission, is conducting a review into hospitality and retail penalty rates. In December a Productivity Commission review recommended that penalty rates on Sundays should be no higher than on Saturdays. After considering more than 6,000 submissions, the commission’s final hearing was held on 15 April. It announced its intention to release its decision within 12 weeks. Interestingly enough, that decision may well end up coming down during the election campaign. If I was the government I would think quite seriously about how many people are involved with and work in the retail sector and the service sector who rely on penalty rates.
It is also worth remembering that over the years penalty rates have attracted a lot of support. Much of it has been bipartisan. For example, the ex-Prime Minister Mr Abbott is on the record conceding that penalty rates are very important to people. He said:
If you’re a low-paid worker one of the things you often love to do is work late nights, weekends, because it does substantially increase your income.
I do not actually know if you ‘love’ to work it because it substantially increases your income, but you might need to work it to increase your income. They are fine sentiments by the ex-Prime Minister—in fact, they are great sentiments—but they are not apparently unshakeable, because we currently have a government that is more concerned with lining the pockets of the rich than ensuring the poor have enough to make ends meet. The budget tonight makes that clear with every issue being seen through the lens of the big end of town, with Australians who earn the most getting a double tax cut while three-quarters of Australian taxpayers receive absolutely nothing. What does it matter if a person misses out on family time over the holidays or on weekends, so long as the company profits go up while their taxes go down? Mr Morrison’s budget shows exactly where his priorities lie. Let us never ever forget the contention of his predecessor, Mr Hockey, that penalty rates are ‘profit murder’.
I am proud to stand here and speak on behalf of the millions of workers who are typically required to work at nights and on weekends while the rest of Australia is enjoying time with families and friends. These are not the fat cats of big business; they are people without investment portfolios or negatively geared properties. They know they are lucky to have a job at all in some cases—these people who work in hospitality and retail, who are expected to be available to serve or assist us when we dine out or shop in our spare time.
Let us remember the nurses and emergency service workers who are on hand to care for us and possibly even save our lives when the need arises. Labor rejects the idea that these workers’ inconvenience and time away from their families is not deserving of compensation. The principle of honest pay for honest work has stood the test of time, and, as the old saying goes, ‘If it ain’t broke, don’t fix it.’ Penalty rates are not broken, and Labor wants to see them left alone, because any reduction would hurt many hard-working Australians.
We have heard a lot recently about infrastructure and the growth of cities, but I represent Tasmania, where our cities are small and a lot of our people live their whole lives in small, rural communities. I want to talk about how reducing or abolishing penalty rates would have particularly severe repercussions in regional and rural areas, not just in Tasmania—which Senator Polley and I represent—but around the country. Let us be clear: we are not talking about wealthy workers raking it in by ‘murdering profits’—thanks Joe; we are speaking about workers whose average income is amongst the lowest of any industry in the country, if not the lowest, according to census data.
The 2011 ABS census calculates the total income earned by workers in the retail industry in rural Australia at $9.1 billion per annum. In 2011, the estimate of average income per worker, including full time, part time and casual work, was $32,200 per annum, whereas in non-rural areas it was $34,500. That is right—retail workers in rural areas already earn, on average, seven per cent a year less than their city counterparts. And in the hospitality industry, the estimated average income per worker was a mere $28,700 per annum.
When you think of somebody in hospitality or retail trying to live on about $30,000 a year, remember that that amount nearly always includes penalty rates. So it is clear that any proposal to lower the income of workers in retail or hospitality is of great concern to anyone who cares about the wellbeing of local communities.
Reducing the incomes of a group of workers who are already receiving the lowest incomes in rural Australia would mean less money available for spending on local goods and services. And I am not just talking about a handful of people. Over 18 per cent of rural workers in Australia are employed in the retail and hospitality sectors.
A recent analysis by The McKell Institute estimates that a cut to penalty rates would result in these workers losing between $370 million and $1.55 billion each year, depending on the extent of the cuts. That would mean a reduction in income in regional areas of between $174.6 million and $748.3 million. Whenever I hear the argument that cutting penalty rates would result in increases in both companies’ profitability and the nation’s level of productivity, I wonder if the people who talk about ‘profit murder’ have ever stopped to think about where money earned from penalty rates is spent.
If penalty rates are cut, small businesses that rely on the wages of local employees to survive will suffer, their workers and their families will suffer, and there will be less money in circulation to boost the economy. How is economic growth helped by reducing the amount of money in circulation?
As anyone who comes from or even visits rural Australia will know, small local business are under threat, and efforts to keep people shopping and trading locally are continually challenged by the intrusion of chain store outlets. Let us just pause and consider the effect in a small town where a business owner does not live locally. The lower levels of workers’ income is accompanied by the transfer of profits to where the business owner lives—usually the city.
We would have to be blind not to see the irony that the retail and hospitality areas are the ones that would feel the greatest impact if penalty rates for workers in the retail and hospitality trades are cut. My own state, Tasmania, is already burdened with a high level of unemployment. If penalty rates in the retail and hospitality sectors are abolished, workers in Tasmania would lose between $31.5 million and $58.7 million per annum. This would result in a loss in disposable income of between $15 and $29.4 million per annum to local economies. That would be a devastating loss.
If the statistics do not make us stop and think, perhaps some individual stories will. As a member of Labor’s Fair Work task force, I have heard firsthand from some of the people whose lives clearly demonstrate that penalty rates are no luxury—people such as Carol, a hotel receptionist, who works 15 hours a week on a three-week rotating cycle. For this, she earns $20,000 a year, with the penalty rate component accounting for 25 per cent of that amount. Carol supports a child and a profoundly deaf mother. She did not seek out working those penalty rate times; that was what was required of the job and sometimes the hours are not at all convenient for her. But work is hard to get. It took her 62 job applications over 33 weeks to find this position, and she wants to hold on to it.
Nobody in their right mind would envy Carol or think she was a ‘profit murderer’, but her employer once referred to her penalty rates as money ‘supporting her lifestyle’. That is a line we have heard before too—lifestyle, indeed! It is people like Carol, often in part-time or casual work at low rates of pay, who need their penalty rates to make ends meet. It is people like that whom Labor are determined to stand up for.
So let us hold on to penalty rates and not bend over backwards to help big companies make even bigger profits at the expense of ordinary workers, which is so unfair. Labor have a better plan for our country: we will put people first.