Welcome to the new economy: Brought to you by the Coalition Government

By Terence Mills

Punitive legislation to hobble and ultimately cripple the union movement has been a key strategy of both government and employer groups in recent times, and the fruits of these endeavours are now being harvested in the form of historically low wages growth together with the wholesale stripping of employment benefits that took decades to achieve.

Real wage growth has fallen into negative territory and stalled at an all-time low. Australian Bureau of Statistics (ABS) data shows that workers’ take/home pay has failed to keep up with the cost of living. Negative real wage growth has occurred only twice since current records began two decades ago, and according to the bureau’s measure of average weekly earnings, the growth in wages is at its lowest level since World War Two. For the last four quarters, annual wages growth has been stuck at 1.9%, the lowest rate ever recorded. That is a significant wage reduction when inflation and population rises are taken into account.

Wages as a proportion of Australia’s total income – its gross domestic product – are now the lowest since records began in 1959.

In an article in Crikey this week, economist Alan Austin noted disturbing data on leave entitlements that were so hard won in the post war years that have now to a significant extent been rolled back: the ABS revealed that more than a quarter of Australia’s workers now have no leave entitlements.

Let’s just reflect on that: more than a quarter of Australia’s workers now have no leave entitlements.

More than 2,527,500 workers were found in August to have no holiday, long service or sick leave entitlements provided by their employer. This comprised 848,200 full-time workers and more than 1,679,300 casual and part-timers.

This escalation of workers without leave entitlements is disturbing for unions and other worker advocates – as well as for employees themselves – as this is yet another instance of trending disadvantage.

The number of workers with only part-time or casual jobs has ballooned recently. The percentage of part-time or casual workers remained steady through the last five Labor years, averaging 29.6%. For the final year, the mean was 29.9%. Through the Coalition period, this has risen significantly to average 31.1% over the past four years and 31.8% over the last full year.

These latest leave entitlements revelations bolster the conclusions drawn from almost all other indicators of the wellbeing of the majority of Australians – cost of living, disposable income, household debt, housing approvals, taxes, charges and others. These show the majority of Australians are progressively getting poorer.

Meanwhile, the very rich minority and the large corporations are enjoying strong trade volumes, high commodity prices, record corporate profits and increasing shareholder dividends, executive salaries and bonuses.

In the last few days, the Federal Court has upheld the right of the Fairwork Commission to reduce or eliminate penalty rates for low income workers without any need to compensate or offset that reduction with increases to the minimum wage despite the prime Minister having said in March when the cuts were announced originally that:

“… an element of modern awards was that any changes would not reduce the take-home pay of workers.

One option was to have the commission make a take-home pay order that whittles back penalty rates at the same time as annual minimum wage increases are awarded.

The employee’s overall pay packet increases and offsets the phased-in reduction in penalty rates,” Mr Turnbull said.

Turnbull has since, not unexpectedly, walked away from his initial inclinations.

Let’s not kid ourselves, these changes in employment entitlements and conditions are not the much heralded and ultra-cool Gig economy where everybody has half a dozen jobs and consider themselves as independent contractors and free spirits owned by nobody and able to turn their hand to any task. These are people who will never be able to buy a house because they won’t qualify for a mortgage loan: they will live all their lives in rental accommodation and will retire with virtually no superannuation and little with which to sustain themselves or to continue paying rent when they are too old to work – taking a holiday for these people will be akin to being unemployed as will a period of sick leave.

The relentless union bashing by successive coalition governments, the pandering to corporations including the current push to reduce company taxes – to be hammered home by the coalition in the next parliamentary sitting – together with our complacency have allowed this state of affairs to take hold and they haven’t finished with us yet.

I find this current state of affairs as an appalling legacy that we have unintentionally bequeathed to the next generation of working Australians.

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