Last Thursday’s pay rise for minimum award wage workers, the lowest in ten years, is below the rate of inflation and means the living standards of many working Australians will go backwards, says the Australian Congress of Trade Unions (ACTU).
ACTU President Sharan Burrow said on Friday: ‘The pay rise of between $5 and $10 a week for minimum award wage workers is below the Treasury’s forecast of 2.75 per cent inflation for the year, meaning low paid workers will suffer a pay drop in real terms.
‘This contradicts the misleading claims of employer groups, including Gary Brack from Employers First on Channel Seven’s Sunrise programme this morning, the Fair Pay Commission and the Government, that have all understated the forecasted level of inflation.’
Releasing an analysis of the Howard government’s Pay Commission’s decision, the ACTU said the Commission’s head, Ian Harper, was also wrong to claim that the disposable incomes of minimum wage workers were keeping pace with the rest of the community.
On Thursday, Professor Ian Harper wrongly claimed: ‘When reductions in tax liabilities are also taken into account, the disposable incomes of employees receiving the standard Federal Minimum Wage (FMW) have not deteriorated relative to disposable incomes in the community.’
(AFPC decision 5 July 2007, p 13)
But ACTU research shows that the FMW has declined to just 63 per cent of average weekly earnings, after tax, from Thursday’s pay commission decision.
Burrow added: ‘It is insulting in a time of strong economic growth that the low paid should fail to receive a real wage increase and that their living standards should decline relative to the rest of the community.’
Earlier, the ACTU said that the minimum wage decision shows the Fair Pay Commission has only listened to big employer groups and the Howard government.
‘Despite rising living costs, unaffordable housing prices and spiralling rents and petrol prices, major employer groups had asked the Pay Commission to award a pay rise of no more than $10 and today we see a pay rise of between $5 and $10 a week awarded to around 1.2 million minimum award workers,’ the federation said on Thursday.
This shows that the Pay Commission is only listening to big business and that the submissions of low paid workers and their unions have been completely ignored, added the ACTU.
ACTU President Burrow said: ‘This measly pay rise is a slap in the face for hard working Australians and their families who are facing rising petrol prices, rents, childcare and education costs.
‘At the same time as they are facing increases in the cost of living, many workers have lost their job security and award conditions such as penalty rates, overtime pay, allowances and public holiday pay under the Federal government’s new IR (industrial relations) laws.
‘The living standards of many working families will continue to go backwards with this decision.’
ACTU Secretary-elect Jeff Lawrence said: ‘It is a scandal that in this time of economic prosperity that low paid workers have been abandoned in this way by the Howard government’s pay commission.
‘Australia’s economy is strong because of the hard work of Australian workers.
‘People employed as cleaners, security guards, retail assistants, childcare workers and production workers are working hard and struggling to keep their heads above water.
‘They will be left further behind by this decision.
‘This pay rise is nowhere near enough to cover the rising cost of living for working families and to ensure they get a fair share of the nation’s economic prosperity.
‘The Prime Minister likes to claim that his government is the best friend the Australian worker has ever had.
‘But this decision is further proof that the Howard government is not managing the economy in the interests of ordinary working families.
‘The government’s IR laws are designed to cut the wages and conditions of ordinary workers and help big business rather than average working Australians.’
Meanwhile, new research that models all of the income tax changes since 1996 shows that ‘average workers have been ripped off under the Howard government’ while high income executives have benefited the most, the ACTU said.
Research released by the ACTU shows that under the Howard government, workers on average wages got just $23 a week in tax cuts while high income earners got a tax cut that was six times higher – $140 a week.
The modelling takes into account all of the government’s income tax changes since 1996, the impact of bracket creep and the GST, changes to the Low Income Tax Offset as well as further tax cuts promised for 2008, and excludes changes to social security such as family assistance.
ACTU President Sharan Burrow said: ‘Like the IR laws, the Howard government’s tax changes are biased against average working Australians.
‘While average earners are due to start receiving a small tax cut this week, this modelling shows that this is just a pre-election sweetener that doesn’t make up for the tax bias against average workers under eleven years of Coalition government.
‘The fact is that low and middle income taxpayers have received only around one third (35 per cent) of the value of the tax changes since 1996 while those on higher incomes received nearly double this share (65 per cent).
‘The vast bulk of the tax changes under the Howard government have benefited high income executives while average workers have been dudded.’
