Annual Wage Review 2016-17 Take Note of Answers

I too rise to take note of the answers to questions, and I would like to talk about some of the principles involved, the process and the purpose of the Fair Work Commission, and lastly to reflect on the politics that so underpins arguments in this place that, unfortunately, are sometimes to the detriment of constructive development of good public policy.

In this place, for a number of years now, I thought there had been fairly broad acceptance by parties on both sides of this chamber that the conditions under which workers work and are employed—whether that comes to penalty rates or minimum wages—should be set by an independent body. That should remove much of the politics out of it. Just as we have the Reserve Bank, which is free to set interest rates, we have an independent body that makes these agreements. What that means is that it can take submissions from a wide range of people to consider both facts and, importantly, the context and how the context is changing, and the commission brings together a wide range of skills and people with different backgrounds who understand different aspects, whether it is the economy, the community or workforce implications. There are a range of perspectives that are brought to that detailed consideration of facts. So I had thought there was a well-established principle, supported by both sides of politics, that we would have an independent body to do this and remove the politicking of the parliament out of affecting the conditions that people work and live to.

The process has been followed by successive governments. Not only governments of this side but Labor governments have followed the same process. And do you know what? The submissions, in terms of their content and form, looked remarkably similar, for the simple reason that governments have departments who help advise and prepare briefs. It should be no surprise that the sorts of things they submit are similar. When Mr Shorten was the employment minister, there was no figure in his submissions on minimum wages. They put forward the same kind of principle-based arguments that the coalition government has done. So, if the Labor Party applied to their own submissions the same standard of criticism they apply to this government’s submissions, they would have to come up with the same conclusions.

In question time today they have criticised the inclusion of facts, and they cherry-picked the fact that the government’s submission says that nearly half of low-paid workers are in the top 50 per cent of household income. They are saying that means that the government must be out of touch, because they are making comments like that. Well, Dr Leigh, from the opposition in the other place, made these comments shortly before Labor came to government:

Given that the typical minimum wage worker lives in a middle-income household, it appears unlikely that raising the minimum wage will significantly lower family income inequality.

Mr Shorten, in 2013 in the government submission, said:

The Panel should also consider the fact that all low paid workers do not necessarily live in low income households.

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Furthermore, the Government’s analysis reveals that around 60 per cent of low-paid employees live in a household with more than one income earner and therefore their living standards are affected by income from other household members.

So the things that, for political reasons, the opposition is dragging up and criticising the government for here have been part of the same process that their own ministers—in fact, the Leader of the Opposition when he was the responsible minister—made.

Why do the Fair Work Commission look at things like minimum wages? What are some of the things they take into account? One of the purposes, as articulated by this government and as articulated by the opposition when they were in government, is to recognise that, if you increase the minimum wage too far, you will in fact impact on small business and their ability to employ low-skilled workers. Mr Shorten has made that point himself when he was the responsible minister in government. So the principle should be supported by both sides and, until this debate, I thought it had been. The process, unsurprisingly, is the same whether the ALP or the coalition is in government. The purpose is about making sure there are more jobs. Unfortunately, the politics from the opposition gets in the way.