The union movement is very pleased to achieve a wage increase of $17 a week for working people reliant on minimum wages but are very concerned that the changes recently announced by John Howard will threaten future pay increases for low paid workers.

Commenting on the decision of the Australian Industrial Relations Commission to grant a modest pay increase for award workers today, ACTU Secretary Greg Combet said:

“The current minimum wage process, through an independent tribunal that balances economic factors along with the needs of low paid workings has once again delivered a decent pay increase for low paid workers of $17 a week.

This raises the federal minimum wage for full time adults to $484.40 a week. For casual workers on a minimum wage that have a 25% loading, this amounts to $15.90 an hour.

However the ACTU is very concerned under the changes announced recently by the Prime Minister, this will be the last national wage case of this type. The Howard Govt has announced changes to the way minimum wages are set so that there will be lower outcomes for up to 1.6 million award workers reliant on the minimum wages system.

The Federal Government came to the wage case this year proceedings offering a pay rise of only $11 a week. This would have meant a cut in real terms in the wages of low paid workers and would have pushed down their living standards – a fact that has been acknowledged by Australian Industrial Relations Commission in its decision today.

If you look back over the last 8 years, if the Howard Government had had its way, then low paid workers would have been $50 a week worse off – that is $2500 a year worse off. It is very important to recognise that because unions fight for people and that we have an independent tribunal that considers all of the evidence that up to 1.6 million working Australians are $50 a week better off under the current wage setting system.

Because this year’s wage case is the last of its type, this is an historic occasion for the ACTU and for those of our staff who have worked on the national wage cases for many years. It is the contribution of union advocates, including people such as Bob Hawke, that have fought very hard and have achieved decent outcomes for working people for many years. They have fought in a tribunal such as this where the needs of the economy are assessed and balanced against the needs of the working people for a decent standard of living. It is this process that has achieved a balance outcome and it is the contribution of union advocates over many years that has helped deliver the living standards that the wider community enjoys today

John Howard is attacking these living standards and working people can expect to be worse off under the changes he proposes. He intends to set up a ‘Fair Pay Commission’ – the title of which is like something out George Orwell because it will lead to less fair outcomes and less fair pay for working Australians.

John Howard’s proposals are to get rid of the independent tribunal and to get rid of unions -to get unions out of the picture from fighting for the rights and living standards of working people. Instead, he wants to put the minimum wages system in the hands of conservative economists who are only going to consider neo-classical economic theories that are divorced from actual reality and to give those theories the legislative force in an effort to hold down minimum wages.

It is a troubling sign that the Federal Government did not even have the integrity to turn up to today’s proceedings. They did not have the guts to come and hear the judgement of the Commission. And similarly, the quality of the representations that the Government made in this year’s proceedings was highly questionable. They have operated in a political way with no respect for the role of an independent tribunal that weighs the evidence, balances the various arguments and considers arguments for wages increases based on their merit.

Now what the Howard Government wants to do is stack the deck and do away with the current system altogether. In its submissions in proceedings this year the Howard Government was particularly cavalier and the Commission’s decision today also indicates it believed this to be the case.

Nevertheless, unions remain determined to fight on in any forum that we can, including in the ‘Fair Pay Commission’, to mount an argument for decent increases for working people. In the labour market today, there are many people who depend on minimum wages that obviously don’t have a lot of bargaining power. These people have depended on organisations, particularly unions, but also independent tribunals and the award system to protect and raise their living standards. Their living standards will henceforth be vulnerable under the changes that John Howard has proposed and obviously the role of unions will change, as will the Commission. But I can assure people that unions will continue fighting for them, their rights and living standards now and into the future.

It is wrong for the Government and employer groups to criticise the current national wage case and how the Commission arrives at its decisions. This is good process – it is a process with much integrity. What we have here is a process that takes around six months where the unions formulate our claim, where we cost the claim, go into workplace and talk working people who depend on min wages and bring them in as witnesses. We also consult with professional economists, conduct research and consider international evidence and bring all this before the Commission. The Federal Government does the same, employers do the same, as do the state and territory governments. Economic argument is carefully considered and at the end of the day the Commission considers the evidence and makes a balanced judgement.

This is a strong and fair process that has continued for 100 years and has served Australia well. The economic issues are thoroughly explored but are balanced against the needs of the low paid. That concept of fairness has been central to our industrial relations system for 100 years. And yet it is that concept of fairness that the Government now wants to do away with.

It is wrong of the Government and business leaders such as Michael Chaney and Hugh Morgan to argue that fairness shouldn’t be part of the workplace relations system. We completely reject this argument. Shouldn’t all employers have an obligation to fairly treat the health and safety of their workers? What would happen if James Hardie did not have an obligation to treat fairly people who are injured or affected by asbestos?

We also reject the suggestion that fairness and equity should be left to the Government to deal with only through the tax and social security system. The most recent federal Budget is a case in point. Low and middle income earners received only a $6 a week tax cut while high income earners received $60 a week – ten times this amount. What is more, from 1 July federal parliamentarians will all enjoy an increased pay packet of at least $205 a week from income tax cuts, cuts to the superannuation surcharge and from a pay increase of over 4%. At the same time, we are looking at pay increase today of just $17 a week for low paid workers. This is rank hypocrisy from the Howard Government – the sort of behaviour that ordinary working Australians are well aware of and despise.

In conclusion, the ACTU is pleased to achieve a $17 a week increase in the minimum wage today. Naturally we would like to have achieved more, but we respect and appreciate the process all the same, and respect the judgement of the Commission.

What unions will now be doing is that we will be out there fighting for working people. We will be going into help people in their workplaces to make sure they are not being ripped off and to stop them losing their penalty rates, their public holidays, their overtime or their shift penalty rates. We will be fighting to keep all of the things that John Howard is now putting up for grabs in the law of the jungle that he proposes by forcing people onto individual contracts without a decent award safety net. Unions will be out there fighting for Australian working people and we will be fighting hard,” said Mr Combet.

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Wages Case Result — June 2005 ACTU Fact Sheeet in Word