News & Current Affairs
16 August 2014
by Kaye Lee
The fair go is going….going….gone?
457 Visas, affordable housing, egalitarian society, employment, minimum wage, National Rental Affordability Scheme, Penalty rates
In 1967, Prime Minister Harold Holt said that he knew of no other free country where “what is produced by the community is more fairly and evenly distributed among the community” than it was in Australia.
The pillars of egalitarianism in Australia were high wages, high home ownership and low unemployment.
A decent minimum wage is a sign of a civilised society. Australia was a world pacesetter in establishing a living wage at the beginning of last century, and it has always been one of the hallmarks of the fair and egalitarian society we have had since that we support a relatively high minimum wage. It is what distinguishes Australia from much of the rest of the world.
A decent minimum wage is one of the bulwarks that prevents Australia developing a large underclass of working poor, which now so dominates the United States. And it is credited as helping to sustain our economy during the slowdown caused by the Global Financial Crisis, when other nations with a lower minimum wage sunk into recession.
Despite this, the Commission of Audit suggested that the way minimum wages are set through an annual review overseen by the Fair Work Commission should be scrapped.
Instead, it is proposing a “minimum wage benchmark”, which would fix minimum wages well below what they are now at 44% of average weekly earnings. If implemented tomorrow, it would mean slashing the minimum wage by almost $140 a week.
We also have Maurice Newman, head of Abbott’s Business Advisory Council, saying “While any discussion in Australia about industrial relations evokes screams of outrage and spectres of WorkChoices, we cannot hide the fact that Australian wage rates are very high by international standards and that our system is dogged by rigidities.”
The figures tell a different story. While big business continues to rake in record profits, wage rises have been so low over the past year that most workers have gone backwards.
The latest wage price index from the Bureau of Statistics shows an average increase of 2.6 per cent in the year to June, well below the inflation rate of 3 per cent – this at a time when productivity is at an all time high.
Not only is the minimum wage under attack, penalty rates are also in the firing line.
On Tuesday, Assistant Infrastructure Minister Jamie Briggs said it was unfair that small businesses had to pay double on Sundays and triple on New Year’s Eve, and it was on the government’s radar.
“We cannot go on in a society where we are charging people on a day which is a normal operating day, double what you would on any other,” Mr Briggs told a small business audience.
Mr Briggs said high labour costs had made businesses “uncompetitive” and hurt youth employment. “This is an area we must reform,” he said.
“But it will only be an area reformed if society is willing to have the debate. And [business] can help lead the debate.”
ACTU boss Ged Kearney said dropping penalty rates will not increase jobs or help small business but damage the economy by lowering the amount of money people spend in stores and restaurants.
“You cut $200 a week out of someone’s pay . . . and small business will be the first to suffer,” she said.
Education is a large factor in employment prospects yet we are reducing funding to secondary schools and increasing the cost of tertiary education. Vocational education courses are being cut as is funding to groups who facilitated the transition from education to employment for vulnerable young people.
Despite rising unemployment, the Coalition plans to expand the 457 visa program, remove existing controls on employers, abolish any training obligations and open the program up to more semi-skilled workers.
In his 2012 IPA Address, Abbott said that ‘under a Coalition government, 457 visas won’t be just a component but a mainstay of our immigration program.’
More than 60 per cent of the 3323 457 visas granted since November last year and subject to labour market testing went to foreign nationals already in Australia.
In skill level 3 occupations, which are mostly trades, 45 per cent of all 457 visa granted were in occupations not on the national shortage list.
In a move that is becoming increasingly common, ministerial advisers encouraged federal officials to “massage” their economic forecasts to match Tony Abbott’s vow to create one million jobs over the next five years amid concern the original estimates would fall short of his target.
Asking department experts to adjust their figures, the advisers to Employment Minister Eric Abetz sought to add 160,000 jobs to the projections brought out in March.
The Abbott government came up with its pledge to create 1 million jobs in five years solely on the employment growth rate achieved under the former Howard government. No modelling or detailed calculations were done to reach the figure of 1 million jobs.
Tony Abbott’s office took the employment growth rate of about 2.2 per cent year-on-year under the Howard government and used it to extrapolate its own job-creation target.
”Abbott’s office assumed they could achieve the same outcome,” a Coalition insider said. ”There was no detailed modelling or serious work done to justify the 1 million job target. They looked at the Howard record and said, ‘We can match it’.”
Treasury forecast in MYEFO that employment would grow three-quarters of 1 per cent this financial year and 1.5 per cent in each of the next three years. A Parliamentary Library analysis commissioned by Labor found that this was likely to leave the Coalition at least 200,000 jobs short of its five-year pledge.
That view was broadly backed by a range of economists who said it would be very difficult for the Coalition to create 1 million jobs in five years, with the mining boom ending and with deep cuts in the federal budget.
The uncertainty about the renewable energy target has also seen us miss out on billions in investment in this growing industry while the government’s decision to no longer support manufacturing has contributed to us losing our car industry along with many other closures.
Along with wages and employment, affordable housing is a crucial factor in an egalitarian society.
A national snapshot of rental affordability in Australia prepared by Anglicare Australia has found there are minuscule and in some cases, zero, levels of affordable housing for people on low incomes, with welfare advocates saying some people will be forced to go without food to afford their accommodation.
Despite this growing crisis, the Coalition discontinued the National Rental Affordability Scheme (NRAS) in the budget. The NRAS is a partnership between the federal government and the states and territories to invest in affordable rental housing which began in 2008. It seeks to address the shortage of affordable rental housing by offering financial incentives to persons or entities such as the business sector and community organisations to build and rent dwellings to low and moderate income households at a rate that is at least 20 per cent below the market value rent.
Domestic Violence NSW said “It’s particularly frustrating that a successful program that increased the availability of affordable rental housing has been targeted, while very expensive tax concessions like negative gearing and capital gains tax exemptions remain in place.”
So with an active push to reduce wages, no plan to create jobs amidst rising unemployment, movement away from federal action on affordable housing while encouraging investors to drive up housing prices, one wonders what Mr Holt would have to say about Abbott’s Australia.