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Category: Media Releases

  • Victorian Rate Cap Policy Costs Economy Over 7,000 jobs and $890 million to GDP

    The Victorian State Government’s policy to cap the rates of local government has cost the Victorian economy 7,425 direct and indirect jobs in 2021-22, and has reduced GDP by up to $890 million in 2021-22, according to new research from the Australia Institute’s Centre for Future Work.

    Key Findings

    • The Victorian Government’s rate caps have reduced employment in Victoria (counting both direct local government jobs, and indirect private sector positions) by up to 7425 jobs in 2021-22. They have also reduced GDP by up to $890 million in 2021-22. The costs of suppressed local government revenues, and corresponding austerity in the delivery of local government services, will continue to grow with each passing year if the policy is maintained.
    • Rates on property are the largest single source of revenue to local governments in Victoria. Of total Victorian local government revenue in 2019-20 ($11.7 billion), rates accounted for $5.6 billion or almost half. Since 2016-17, the Victorian state government has capped the amounts local governments can collect from their ratepayers.
    • The rate cap policy, imposed by the Victorian state government on local governments, interferes with the mission of service delivery and expanded, secure employment.
    • The local government sector in Victoria employs about 50,000 people in a wide range of services and occupations, including road planning and maintenance, home and aged care, waste disposal, libraries, childcare, school crossing supervision, maternal and child health, the State Emergency Service, and environmental management.
    • The rate cap policy becomes more restrictive as the overall economy slows rather than less restrictive, since the rate cap is tied to inflation indexes which tend to slow when the economy is weak.
    • The rate caps act as a brake on recovery and growth by embedding a dynamic of self-fulfilling fiscal restraint and austerity.
    • Victoria’s rate cap policy has inhibited a normal trend of expanding and improving local government services in line with population growth, rising living standards, and economic expansion.

    “Rate caps are an arbitrary policy which ties growth in overall rates revenue to price indexes which have nothing to do with demand for services or democratic accountability,” said Dan Nahum, economist at the Australia Institute’s Centre for Future Work.

    “It’s not even the case that ratepayers necessarily save any money as a result of the rate cap. There has been a shift to other forms of revenue-raising that are less progressive and socially equitable.

    “Rates bills are calculated based on relative property valuations – so even if local governments are collecting less from rates overall than they would in the absence of the cap, if your property value has gone up relative to others in your community, then your rates payments do as well.

    “There is no evidence that rate caps makes local councils ‘more efficient’. Instead, it simply takes money out of much-needed council services and robs local communities of employment opportunities.

    “Far from protecting ratepayers and residents, rate caps hurt them. Rate caps compromise service delivery, negatively impact employment and wages amongst residents employed in the local government sector, result in higher fees collected through other revenue tools, and reduce local government expenditures flowing back into the private sector.

    “There is simply no good economic reason for rate caps. By abolishing the rate caps policy, the Victorian Government could create jobs and stimulate the economy post-COVID.”

    The post Victorian Rate Cap Policy Costs Economy Over 7,000 jobs and $890 million to GDP appeared first on The Australia Institute's Centre for Future Work.

  • Eight free weeks: Time stolen from employees skyrockets during COVID

    The number of hours stolen from Australians by employers has skyrocketed during the COVID-19 pandemic, with the average employee now providing eight full-time weeks of free work per year.

    17 November 2021 marks Go Home on Time Day, run by the Australia Institute’s Centre for Future Work, and now in its thirteenth year.

    Key findings from this year’s Go Home on Time Day report:

    • The average employed Australian is performing 6.13 hours of unpaid work each week in 2021, up from 5.25 in 2020, and 4.62 in 2019.
    • That time theft equates to 319 hours per year, or over eight standard 38-hour work weeks per worker.
    • This unpaid overtime represents the loss of $125 billion in income from Australian workers in the past year, or $461.60 per worker every fortnight.
    • COVID-19 appears to have accelerated Australia’s time theft crisis, with 26% of workers reporting their employers’ expectations of their availability increased during the pandemic.
    • Amidst the growth in working from home during COVID, employers are using new technologies to pressure and monitor employees. 39% of workers report their employers are remotely monitoring them through technology like webcams and keystroke counters.
    • Young workers aged 18-29 performed the most unpaid overtime (8.17 hours per week)

    “This year Australian workers are taking home a smaller share of GDP than we have ever seen before. Yet, time-theft is rife and bosses are stealing record amounts of unpaid time from workers,” said Dan Nahum, economist at the Australia Institute’s Centre for Future Work.

    “Arriving at work early, staying late, working through breaks, working nights and weekends, taking calls or emails out of hours – there are a host of ways employers steal time from their employees, and we see them all being used prodigiously.

    “COVID-19 has made the situation worse, indicating work-from-home does not necessarily improve work life in favour of employees. Instead we’re seeing further incursion of work into people’s personal time and their privacy. In many cases it’s making it easier for employers to undercut Australian minimum standards around hours, overtime, and penalty rates.

    “Alarmingly work-from-home arrangements have been accompanied by innovative surveillance methods, with 39 per cent of employees saying their employers remotely monitor their activity and a further 17 per cent unsure whether they were being electronically monitored or not. When one in three workers say they are being monitored via webcam and 30 per cent say their every keystroke is being recorded, it’s clear our industrial laws are not keeping pace with tech.

    “If Australians want to stop this alarming theft of billions of hours of time, and hundreds of billions of dollars of income, policymakers need to strengthen workers’ power to demand reasonable, stable hours of limit, and fair payment for every hour they work. This is all the more important with so many Australians working from their own homes.”

    Mr Nahum said it was an injustice that many Australians report being eager for more paid hours while contributing free ones to their boss.

    “Half the part-time and casual workers in this country report they are keen for more paid hours, yet the average part-timer is giving away over 4.5 hours a week and the average casual just over 5 hours,” Mr Nahum said.

    “These are worker efforts that should end up as wages in someone’s pocket, not a boost to a profit column.”

    The post Eight free weeks: Time stolen from employees skyrockets during COVID appeared first on The Australia Institute's Centre for Future Work.

  • Active Policy Measures Needed to Stop Decline of Journalism

    The media and information industries have lost some 60,000 jobs in Australia over the last 15 years. With almost half of those jobs lost during the COVID-19 pandemic, new research shows active policy supports are urgently needed to stabilise and protect the ‘public good’ function of journalism.

    A new report by the Australia Institute’s Centre for Future Work, The Future of Work in Journalism, catalogues the employment and economic damage wrought in media and information industries by the combination of technological change, new business models, and globalisation. The report was commissioned by the Media Entertainment & Arts Alliance (MEAA), who are urging the Federal Government to step up its support for Australian domestic journalism.

    Key findings:

    • The broader information, media, and telecommunications industry lost over 30,000 jobs between 2007 (its peak employment) and 2019.
    • Publishing was the worst-affected sub-sector, losing over half of its jobs as newspapers and other print media grappled with new technologies and major losses. Almost 30,000 more jobs have also been lost in this sector since the start of the COVID-19 pandemic.
    • New jobs in digital activities (such as internet publishing) are not offsetting the loss of work in conventional media.
    • Jobs remaining in the media industry have become more insecure: with almost one-third of positions part-time, and a growing share of casual and contractor positions.
    • Real wages are falling in the media industry, despite a dramatic increase in labour productivity.
    • Real value-added per employee in media industries has been growing at 4% per year since 2012, but real labour compensation has been falling.

    “It is ironic that we supposedly live in an ‘information economy’ yet Australia’s capacity to contribute fully and successfully to that information era is crumbling due to financial losses and massive job destruction,” said Dr Jim Stanford, director of the Australia Institute’s Centre for Future Work.

    “Workers in industries like journalism are producing more than ever despite the turmoil of technological change, job losses and restructuring. But the extraordinary effort by workers is not translating into more secure or better paid jobs—quite the contrary.

    “Quality journalism is a public good, with the distribution of reliable information to citizens the key to a well-functioning modern democracy—particularly in times of crisis, like the pandemic. The failure of private markets to sustainably supply this service necessitates public policy action to stabilise the industry and support continued quality journalism,” Dr Stanford said.

    Marcus Strom, the Media Entertainment & Arts Alliance’s (MEAA) Media Federal President, urged the Commonwealth Government to step-up its support for domestic journalism.

    “The report makes clear that years’ of disruption, undermining and neglect have left Australian journalism and journalists in a fragile state,” said Marcus Strom, Media Federal President at the MEAA.

    “Public interest journalism is a public good. It informs and entertains Australians, ensures the public’s right to know, and holds the powerful to account. If Australians want that to continue, then there is no time to waste to address the many challenges facing journalism,” Mr Strom said.

    The post Active Policy Measures Needed to Stop Decline of Journalism appeared first on The Australia Institute's Centre for Future Work.

  • Insecure Workers Have Been the Shock Troops of the COVID-19 Pandemic: New Report

    New research from the Australia Institute’s Centre for Future Work confirms that workers in casual and insecure jobs have borne the lion’s share of job losses during the COVID-19 pandemic – both the first lockdowns in 2020, and the more recent Delta-wave of closures.

    Key Findings:

    • Since May, workers in casual and part-time jobs have suffered over 70% of job losses from renewed lockdowns and workplace closures.
    • Casual workers have been 8 times more likely to lose work than permanent staff. Meanwhile, part-time workers have been 4.5 times more likely to lose work than full-timers.
    • The report documents the disproportionate concentration of insecure work among women, young workers, and in the retail and hospitality sectors. Women hold over 53% of all casual jobs, but only 48% of permanent roles.
    • Average wages are much lower in insecure jobs. Casual workers, on average, earn 26% less per hour and 52% less per week than permanent workers – contrary to the common assumption that casual workers receive higher wages to offset their lack of entitlements and job protections.
    • The research estimates that if casual workers received the same hourly wages as permanent staff, overall wage incomes in Australia would grow by $30 billion per year, or 3.5%. That would mark a welcome change from the past eight consecutive years of record-low wage growth.
    • The report also shows that less than half of working Australians now hold a permanent, full-time waged job with entitlements. The traditional norm of a ‘standard’ job has been eroded on all sides by part-time jobs, casual work, temporary and contractor jobs, precarious forms of self-employment, and (more recently) on-demand gig work.

    “Workers in insecure jobs have been the shock troops of the pandemic,” said Dr Jim Stanford, director of the Australia Institute’s Centre for Future Work, and report author.

    “They suffered by far the deepest casualties during the first round of layoffs. Then they were sent back into battle, as the economy temporarily recovered. But now their livelihoods are being shot down again, in mass numbers.

    “It is bad enough that workers in these jobs do not receive basic entitlements like paid sick leave or severance protections. But even when they are working, they are paid far less than other workers.

    “The long-term and multi-faceted expansion of insecure work, in all its forms, is ripping apart economic and social stability in Australia.”

    “Recent changes in labour law, which confirm the right of employers to use casual labour in any position — even stable long-term roles — will lead to further expansion of insecure work once the pandemic is over. New pathways for workers to convert to permanent status have numerous limitations and exemptions, and will not significantly affect growing job insecurity.”

    The post Insecure Workers Have Been the ‘Shock Troops’ of the COVID-19 Pandemic: New Report appeared first on The Australia Institute's Centre for Future Work.

  • When the Show Cannot Go On: Rebooting Australia’s Arts & Entertainment Sector After COVID-19

    New research from the Australia Institute’s Centre for Future Work, written by Senior Economist Alison Pennington and Monash University’s Ben Eltham, reveals the ongoing, devastating impact of COVID-19 on Australia’s arts and entertainment sector and provides a series of recommendations to government that would reboot the creative sector following the crisis.

    Key Findings:

    • The arts and entertainment sector is a significant employer in Australia that makes a substantial contribution to the economy.
    • More people work in broad cultural industries (over 350,000) than many other areas of the economy that are receiving greater policy supports, including aviation (40,500) and coal mining (48,900).
    • Despite years of significant funding pressures and policy neglect, the arts and entertainment sector contributed $17 billion in GDP to the Australian economy in 2018-19.
    • However, due to their disproportionately insecure and precarious labour market conditions, arts and entertainment sector workers are experiencing significant ruptures in their employment arrangements due to COVID-19 and the federal government has not adequately responded to the scale and severity of the crisis.
    • Looking ahead, adequate support to rebuild the sector should include: expanding funding to community arts organisations and artists; introducing a new Commonwealth creative fellowships program; creating a whole-of-Australia public streaming platform; introducing an Australian content quota on all services, including international streaming platforms; introducing a digital platforms levy to fund a merged-content production fund; better coordinating cultural policy between federal, state and local government levels, especially during the COVID-19 recovery; and strengthening pay and conditions for arts and entertainment sector workers.

    Quotes attributable to Ben Eltham, School of Media, Film and Journalism, Monash University:

    “COVID-19 has badly damaged Australia’s arts and cultural sector. Rolling lockdowns and health restrictions have devastated the live entertainment sector. Around the world, millions of artists and cultural workers have been thrown out of work by the pandemic,” Eltham said.

    “Tens of thousands of artists now face lockdowns across major cities without adequate protections for their jobs, incomes and productions.

    “The Morrison government’s policy response to the crisis has been late and inadequate. The Morrison government’s attacks on universities, the ABC and local production quotas are all bad news for the future of Australian culture.

    “The pandemic has changed the way we think about creativity and culture. Australians have turned to the arts in their time of need, embracing cultural pastimes during extended lockdowns. We have rediscovered the value of culture, even as the pandemic has spread.

    “Old arguments about government spending have been turned on their head. For many artists, JobKeeper was the first time they had been able to draw a steady, liveable income from their craft. The massive cash injection shows that Australians can afford a better society and culture if we want.”

    Quotes attributable to Alison Pennington, Senior Economist, Centre for Future Work at the Australia Institute:

    “Destructive market-first policies eroded the richness and diversity of arts and culture in Australia long-before COVID-19 hit. Endless short-term grant cycles and philanthropic dependency is not a place the arts and culture sector should “snap back” to,” Pennington said.

    “Australia needs a total public-led reboot of the arts. This cultural reconstruction must ensure that the sector does not just survive the pandemic, but stands ready to flourish on the other side. It must lay the groundwork for a sustainable, vibrant future for the arts and culture, built through ambitious public investment and planning across many sectors of our cultural economy.

    “Australia’s arts and cultural sector needs an ambitious public investment program to provide reliable funding for arts organisations from the grassroots-up, provide arts education to all children, and rebuild cultural labour markets to ensure that artists and cultural workers earn decent, living incomes.”

    The post When the Show Cannot Go On: Rebooting Australia’s Arts & Entertainment Sector After COVID-19 appeared first on The Australia Institute's Centre for Future Work.

  • New Research: Commonwealth Can Afford $10b for Aged Care Recommendations

    Implementing the recommendations of the Royal Commission into Aged Care Quality and Safety will require additional Commonwealth funding of at least $10 billion per year, and there are several revenue tools which the government could use to raise those funds, according to a new report on funding high-quality aged care released by the Australia Institute’s Centre for Future Work.

    Key Findings:

    • While the Royal Commission’s 148 recommendations were not explicitly costed, the Centre for Future Work report shows that $10 billion per year (approximately 0.5% of Australia’s GDP) would be the minimum required to move forward with the urgent reforms in regulation, employment practices, and quality benchmarks advised by the Commission.
    • Australia’s public spending on aged care is much lower than other industrial countries with better records of aged care service. It also notes that Australia’s overall tax collections are also much smaller (by about 5% of GDP) than the OECD average, and have declined relative to Australia’s GDP in recent years.
    • The report recommends that initial improvements in aged care funding should proceed immediately. With the Budget projected to incur major deficits for many years (due to the COVVID-19 pandemic and recession), it is neither necessary nor appropriate to fully ‘fund’ incremental aged care spending in the initial and most urgent years of reform.
    • However, as economic and fiscal conditions stabilise, additional revenue sources will be important in underpinning high-quality aged care. The report highlights five specific options for raising additional revenue – two of which were proposed by the respective Royal Commissioners:
      • A 1 percentage-point Medicare-style flat-rate levy (proposed by Royal Commissioner Briggs)
      • A set of modest adjustments to personal income tax rates, preserving the existing progressivity of the system (similar to the proposal of Commissioner Pagone)
      • Cancelling the legislated Stage Three income tax cuts scheduled to begin in 2024 (which deliver most savings to the highest-income households)
      • Reforms in the treatment of capital gains and dividend income in the personal income tax system
      • Reforms to company taxes to eliminate loopholes and raise additional revenues

    “Australia is one of the richest countries in the world. There should be no argument over whether we can afford to provide top-quality, respectful care to the elders who helped build our economy and our society,” said Dr Jim Stanford, Director of the Australia Institute’s Centre for Future Work, and co-author of the report.

    “The government has access to a whole suite of revenue options to support the ambitious and quick implementation of the Royal Commission’s recommendations. That effort must start with the 2021-22 Commonwealth budget.

    “There is no immutable economic or fiscal constraint holding back the government from doing right by Australia’s elders. The only question is whether this government places enough priority on caring for seniors with the quality and dignity they deserve,” Dr Stanford said.

    ANMF members have been calling out the failures in aged care for many years and urging governments to make the changes needed to ensure dignified care for older Australians. Governments have ignored these calls for as many years. This cannot continue. The findings of the Royal Commission into Aged Care Safety and Quality have made this abundantly clear,” said Annie Butler, ANMF Federal Secretary.

    “This research demonstrates both the need for investment in the aged care sector and how it can be achieved leaving the Government with no legitimate excuses for continued inaction.

    “However, there must be appropriate “strings attached” to any increases in funding provided to aged care providers, providers must be made fully and transparently accountable for the use of taxpayers’ money and assure Australians that their money is going directly to quality care for their loved ones.

    “If Australia is to regard itself as a compassionate, decent society the Morrison Government must stop the suffering and neglect of older Australians by acting now,” Ms Butler said.

    “This report explains why aged care workers are left in tears after their shifts,” said Caroyln Smith, United Workers Union Aged Care Director.

    “The $10 billion annual funding shortfall is leading to horrendous human costs in aged care, with older Australians left unsafe and vulnerable, and workers left physically and emotionally exhausted.

    “This report once again underlines that the Federal Government needs to substantially and effectively address the human toll the aged care crisis is taking on older Australians, their families and aged care workers,” Ms Smith said.

    The post New Research: Commonwealth Can Afford $10b for Aged Care Recommendations appeared first on The Australia Institute's Centre for Future Work.

  • Australia’s Electricity Infrastructure Undermined by $1 Billion Per Year Under Investment

    The resilience of Australia’s electricity infrastructure is being undermined by a chronic pattern of underinvestment in maintenance and upkeep, the result of rent-seeking by private electricity producers and a deeply flawed regulatory system.

    That is the conclusion of a detailed review of empirical and qualitative data on the transmission and distribution system contained in a new report from the Australia Institute.

    Key findings:

    • The electricity grid is facing increasing challenges: including increased severe weather events, bushfires, and the need to reliably integrate new renewable energy generation into the system. But years of underinvestment in capital and maintenance have left the system vulnerable to disruptions, failures, and disasters.
    • The report shows that maintenance and operating costs across the system should be increased by at least $1 billion per year, to match historical levels of real spending per electricity customer.Real per capita operating and maintenance expenditures have been slashed by 28% (in distribution) and 33% (in transmission) compared to 2006 levels.
    • The electricity industry is allocating just 15% of its revenues to capital spending, despite the needs for new capacity and upgrading – down from 25% in 2007.
    • Within this shrunken envelope of operating and maintenance costs, the industry’s focus has shifted away from hands-on upkeep of the grid in favour of managers, sales staff, financial experts, and other overhead functions. There are now 40% more office managers and professionals working in the industry (mostly in finance and sales) than electricians.
    • With this expansion of unproductive corporate bureaucracies, productivity in electricity has performed worse than any other sector in Australia’s economy: real output per hour worked has fallen one-third since 2007. This trend is worsened by chronic underinvestment in hands-on maintenance and upkeep, causing greater vulnerability to outages, accidents, and shut-downs.
    • A perverse pattern of behaviour has emerged in the regulatory system, whereby transmission and distribution companies submit requests for operating expenses which the AER seemingly rolls back – only to have those artificial budgets underspent by the companies, who are allowed to keep some of the savings. This artificial process has padded already-rich profits of energy companies, while ignoring the real needs of the grid for improved equipment and reliability.
    • The statistical analysis in the report is supplemented by evidence gathered from 25 front-line power industry workers, who attest to their personal experiences with underinvestment, poor maintenance, safety hazards, and environmental damage.
    • The report makes 7 recommendations for regulatory reforms that would allocate more resources to the real work of maintaining and upgrading the grid (so it is better prepared for future challenges like climate change and growing renewable generation), while reducing the waste of unproductive financial and speculative activities.

    “The stresses on Australia’s electricity grid are becoming more severe – including climate change, bushfires, and integrating renewable energy. We should be investing more in the quality and safety of the grid, not less. But the combination of energy company greed and deeply flawed regulatory practices is producing systematic underinvestment in this vital piece of electrical infrastructure,” said Dr. Jim Stanford, director of the Australia Institute’s Centre for Future Work.

    “Australia’s fragmented, irrational electricity system has produced soaring prices for consumers, shaky reliability, but soaring profits. It’s time to rethink the fundamental priorities of the regulatory system – starting with channeling more needed investment into the power grid,” Dr Stanford said.

    “Over the past 15 years, high-vis maintenance and transmission workers have been replaced by telemarketers, spin-doctors and banking spivs. This has done nothing for network reliability, but has left us unprepared for the challenge of extreme weather and the incorporation of renewables to our energy supply,” said Michael Wright, Assistant National Secretary of the Electrical Trades Union.

    “Substantial investment is needed to retool for an unpredictable future. Energy generation and distribution is the backbone of industry and jobs and privatisation has simply cost consumers and jobs. Governments must stop inviting private sector financial parasites to feast on our energy system and instead focus on the mammoth task of preparing for climate change,” Mr Wright said.

    The post Australia’s Electricity Infrastructure Undermined by $1 Billion Per Year Under Investment appeared first on The Australia Institute's Centre for Future Work.

  • Casual Job Surge Widens Gender Pay Gap

    New research, released for International Women’s Day (8 March 2021), shows Australia’s recovery from the pandemic recession has widened the gender pay gap, as women’s jobs returned on a more part-time and casualised basis than for men.

    The report, by the Centre for Future Work, warns that Australia’s gender pay gap could deteriorate even further in the wake of policies proposed by the Government for 2021: including the further expansion of casual work and reduced pay for part-time workers, tabled in the omnibus industrial relations bill; public sector pay caps for both federal and state employees; and a high-cost, inaccessible childcare system.

    Key findings:

    • Women suffered disproportionate job losses when the COVID pandemic hit, and as the economy recovers are returning to jobs that are relatively more insecure.
      • Employment for women declined almost 8% between February and May 2020—over 2 percentage points worse than for men.
      • Women’s employment is still 0.9% lower than in January last year (around 53,000 less jobs), while male employment went up over that same period (by an additional 7,000 jobs).
      • Job-creation since May (the worst month of the COVID recession) has been heavily concentrated in casual and part-time jobs. From May through November, casual jobs made up over 60% of new jobs –and women filled 62% of those casual roles.
      • The disproportionate concentration of women in newly-created casual and part-time jobs is largely responsible for a significant widening of the gender pay gap after May.
    • Measuring the gender pay gap using total average earnings data (including both full-time and part-time workers, and bonuses and overtime as well as ordinary time wages) indicates that the gender pay gap is 31% across all jobs. That is a more dire, but more accurate, measure of the pay gap than other measures which include only full-time jobs.
    • Three major existing and proposed government policies could further widen pay inequality in 2021:
      • The further expansion of casual work and reduced pay for part-time workers, tabled in the omnibus industrial relations bill.
      • Public sector pay caps for both federal and state employees.
      • A high-cost, inaccessible childcare system.

    “The gendered nature of the pandemic recession on Australia’s labour market has markedly worsened pay inequality,” said Alison Pennington, senior economist at the Centre for Future Work.

    “Women lost jobs at a greater rate than men when the pandemic hit, and as the economy has recovered, are returning to fewer jobs offered on a more casualised basis. The gendered employment recovery is disproportionately leaving women with less hours, security and pay than men—a clear example of why a simple post-COVID “snap back” was never adequate for women.

    “Women have been bearing the brunt of the COVID recession while governments have targeted stimulus spending in bloke-heavy industries, neglecting investment in industries that support women’s employment, including healthcare, education and social services. To stop further deterioration in pay inequality, targeted efforts to lift women’s work and earning opportunities is critical.

    “Focused investment in women’s job creation, free childcare, and wage-boosting industrial relations policies are all within reach of governments at both federal and state levels.”

    The post Casual Job Surge Widens Gender Pay Gap appeared first on The Australia Institute's Centre for Future Work.

  • Business Council of Australia Research Confirms Centre for Future Work Research

    However, the BCA’s expressed concern for ‘the future of bargaining’ contradicts its support for the Government’s omnibus bill which will further undermine genuine bargaining and suppress already record-low wage growth.

    “The Business Council of Australia celebrates the benefits of enterprise agreement (EA) coverage by comparing higher average wage outcomes obtained under EAs with other pay-setting methods. Ironically, this endorsement is offered in their support for the Government’s omnibus IR Bill which will result in an enterprise bargaining system involving less union representation and reduced scrutiny of sub-par EAs by the regulator,” said Alison Pennington, senior economist at the Australia Institute’s Centre for Future Work.

    “However, empirical data proves union representation is essential to achieving higher wage gains in EAs – the very advantage that the Business Council of Australia extolls.

    “By weakening the ‘better off overall test’ (BOOT), watering down scrutiny and approval processes, and introducing 21-day approval deadlines, the government’s IR Bill will accelerate growth in non-union EAs. For the last 10 years, non-union EAs have delivered lower wage increases than union-covered EAs. Alarmingly, the majority of non-union EAs have not specified any wage increases at all.

    “These sub-par EAs are what the business lobby want more of, but they will not ‘save’ enterprise bargaining. More non-union EAs will come at the expense of genuine collective bargaining, and would produce a decline in average wage increases for EA-covered workers.

    “In fact, the BCA’s proposals would take the “bargaining” out of enterprise bargaining, and wage increases out of enterprise agreements.

    “Do not be fooled by business lobbyist ‘complexity’ claims. The collapse of enterprise bargaining in the private sector is due to long-term structural factors including de-unionisation, employer resistance to genuine bargaining, full legal protection for free-riding, and failure of the Fair Work Act to support genuine bargaining in EA formation.

    “The current EA system has produced a long-term decline in independent employee representation, especially in the private sector.

    “Rebuilding collective bargaining and arresting wage stagnation will require a very different direction in reforming Australia’s IR laws, including the phase-out of non-union EAs, genuine review and approval processes, and multi-employer and sectoral bargaining.”

    Key findings from Centre for Future Work research:

    The post Business Council of Australia Research Confirms Centre for Future Work Research appeared first on The Australia Institute's Centre for Future Work.

  • Omnibus IR Bill will Further Reduce Wage Growth

    The bill proposes sweeping changes to labour laws which would see an acceleration of EAs written unilaterally by employers, without negotiation with a union. EAs will be exempt from the current Better Off Overall Test, subject to less scrutiny at the Fair Work Commission, and employers will have less stringent tests to ensure their proposed EAs are genuinely approved by their affected workers.

    Key findings:

    • Wage increases under non-union EAs are consistently and significantly lower than in union EAs; on average one-percentage-point lower since 2010.
    • The majority of non-union EAs approved between 2006 and 2019 did not specify any wage increases at all, instead linking wage increases to non-legislated measures like CPI, minimum wage decisions by the Fair Work Commission, or employer discretion.
    • In addition to lower (or no) wage increases, the average duration of a non-union EA is longer than for union EAs, locking in inferior wage outcomes for longer periods of time.
    • The exemption for EAs to meet the Better Off Overall Test (BOOT), which shows whether employees would be better off under a proposed EA than under the relevant Award, is supposed to last for two years. But in reality, the terms of EAs negotiated under the BOOT exemption could stay in effect for many years, unless they are renegotiated or terminated.
    • While the overall share of workers covered by EAs will likely increase if these measures pass, a higher proportion of EAs will consist of sub-standard, lower-wage deals, which will see Australia’s current record-low wage growth get worse, not better.

    “When the COVID-19 pandemic hit, wage growth slowed virtually to zero. The omnibus bill will lock in that wage stagnation, by further weakening the already-constrained ability of workers to negotiate genuine collective agreements,” said Alison Pennington, senior economist at the Australia Institute’s Centre for Future Work.

    “Australia’s experience under WorkChoices, when similar policies were implemented, demonstrates that if the proposed bill is introduced both the number of non-union EAs will increase, and the share of EAs without any specified wage increases will grow.

    “Non-union EAs deliver significantly worse wage outcomes that union-EAs, even with the BOOT in place. Removing the BOOT will open the floodgates for employers to rush the approval of EAs that undercut Award wages, further suppressing wages growth in 2021 and beyond.

    “Any increase in the number of lower-wage, non-union EAs will reduce rather than lift the wages and conditions delivered through EAs overall, leaving Australian workers worse-off.”

    The post Omnibus IR Bill will Further Reduce Wage Growth appeared first on The Australia Institute's Centre for Future Work.