Victorian Trades Hall Council. The voice of Victorian workers since 1856.Victorian Trades Hall Council. The voice of Victorian workers since 1856.

Two million working families will be worse off under Govt wage plans, says ACTU

Federal Government plans to change the way minimum wages are set would mean up to two million working Australians would either never get a pay rise or would get much less than they do under the current 'independent umpire' system says the ACTU.

Commenting on reports that Federal Cabinet is meeting today to discuss changing the way minimum wages are set, ACTU Secretary Greg Combet said:

"Basically the Government wants to find a way of bringing in a US-style system where minimum wages are so low that millions of working families live in poverty despite working full-time.

Minimum wages in the US are just $5.15 an hour and have been increased only once (by 40¢) since 1996.

The Employment Minister, Kevin Andrews and the Treasurer, Peter Costello have both said they are looking at a scheme where they would hand-pick people such as Government officials from Treasury or from the Reserve Bank to set minimum wages.

The 'expert group' proposal is a back-door way of scrapping Australia's independent wages umpire and giving the Federal Government control over minimum wages.

It effectively means the Liberal Party, when in Government, would control the pay packets of the 1.5 million hotel workers, cleaners, waiters, bar attendants; sales assistants and other Australians that are reliant on minimum wages.

Since 1996, the Howard Government has opposed every increase in minimum wages sought by the ACTU and if it had had its way, then workers on the minimum wage would be more than $2,200 a year worse off than they are now.

The ACTU has written to the Prime Minister to express its strong support for the current system of setting minimum wages that is politically independent and to correct misleading statements the Employment Minister has recently made about the role of the AIRC.

It is wrong for the Employment Minister to suggest that the AIRC lacks 'economic rigour' or fails to sufficiently consider the impact of wage rises on employment. (Defence of the Umpire - ACTU information paper)

In fact the AIRC has a legal requirement to consider the employment and economic impact of its decisions and more than 80% of its 100 page finding in last year's wage case was devoted to the state of the economy and consideration of the possible employment impact of a wage increase.

The fact is that that employer groups and the Government have failed to provide convincing evidence to the Commission that moderate increases in minimum wages cause job losses. Having lost the argument in the AIRC it now seems they now want to axe its role in hearing the minimum wage case altogether.

The ACTU is also strongly opposed to the Government's plan to collapse the existing skill-based career structure of minimum wages into a single minimum wage rate. This is a short-sighted move that would destroy incentives for low paid workers to acquire skills and would add to the current skills and labour crisis that is already causing major economic damage.

The ACTU calls on the Federal Government to guarantee that minimum wages will continue to be set independently of the political process and to rule out tampering with the AIRC."


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