‘Good story’ for workers but will Labor’s fair go agenda pay off?

Many politicians do outrage, but none do it as Jacqui Lambie does. This week she said she’d tried to take a cool look at proposed changes to workplace laws. Maybe so, but she didn’t stay cool for long while speaking about them.

She set out to explain on Thursday why she was voting for government proposals to improve workers’ conditions. The big miners’ lobby, the Minerals Council, described these changes as a “declaration of war” against business.

Illustration by Jim PavlidisCredit:

“We give you a little bit, and you take the whole kit and caboodle,” said Lambie as she told big business why firms are now to be banned from using labour hire companies to cut costs. “This labour hire crap, I will tell you now, is way off the radar.

“Sometimes,” she said, “labour hire works. But you big corporations are abusing it ... and you’re cutting corners to beef up your profits. Quite frankly, you should be ashamed of yourselves.”

Lambie cited Qantas as an example, then moved on to the minerals sector: “Seriously, with the amount of profits that you people make – big mining, big gas – you do not pay your people properly. You have brought this on yourselves.

“I’m sick and tired of hearing of miners who are doing the same job getting paid $30,000 less than their mates or of having their mates coming to me and saying, ‘It’s so unfair that I get an extra 30,000 bucks because I’m not working for a labour-hire company.’”

Labour hire workers will now need to be paid at least as much as direct employees when doing the same work.

Senators Jacqui Lambie and David Pocock with Labor’s Minister for Employment and Workplace Relations Tony Burke on Thursday.Credit: Alex Ellinghausen

“So you’re going to lose a little bit more of your profit,” Lambie mock-empathised with BHP and Rio. “I tell you what – it wouldn’t even be a sneeze in a hanky. You won’t even notice it.”

BHP claims the change will increase its costs by $1.3 billion a year. The company’s profits last financial year were up by 16 per cent to $US40.6 billion ($61.5 billion) at a record profit margin of 65 per cent. Memo BHP CEO Mike Henry: Don’t ask Jacqui Lambie for a hanky to cry into. Or enter a popularity contest against her.

And that was over just one of the Albanese government’s workplace law reforms that passed the parliament this week – with the support of Lambie and her colleague Tammy Tyrrell, fellow independents David Pocock and Lidia Thorpe, and the Greens. It was opposed by the Coalition.

Some of the other measures? Wage theft is now a criminal offence. So is industrial manslaughter. A second set of the government’s workplace reforms is due to go before the parliament next year.

Lambie’s outrage is effective for two reasons. First, it’s genuine. She’s a pretty reliable fairness compass.

And it works for her electorally: “Other than the Northern Territory, Tasmania probably is the most economically disadvantaged jurisdiction in the country and it saw the least benefits from the mining boom,” says Emma Dawson, executive director of the think tank Per Capita.

This defeat is embarrassing for the Minerals Council. It committed $24 million to an advertising campaign against the government’s reforms to labour hire. The council’s head, Tania Constable, stung by the loss, called the change “economic vandalism” and vowed to campaign for the law’s repeal.

Minerals Council of Australia CEO Tania Constable says the government’s workplace law changes are “economic vandalism”.Credit: Alex Ellinghausen

The Workplace Relations Minister, Tony Burke, has some advice for her and her members: Instead of spending your money campaigning against the government, pay your workers properly.

The bigger picture is that Australia is grappling with entrenched unfairness. “For the last few decades we’ve experienced the dominance of an economic system that rewards people already doing well and makes it harder for people to build a life from their own hard work and effort,” Dawson says.

It’s no wonder, then, that Australians are losing confidence that their work will be rewarded fairly. The annual Scanlon Institute report on Australia’s social cohesion, taken in July, found that only 12 per cent of the 7500 respondents agree strongly that hard work is rewarded.

“The whole Western world has done this – building aggregate growth in the economy while taking the eye off the distribution part,” Dawson tells me. “I’m not a communist but if we don’t effectively regulate and people despair, then we’ll end up with Trump.”

Hyperbole? The US is an extreme case, but it is, indeed, a case study in the results of the corrosion of faith in a socioeconomic system. Trump represents people who feel left behind, overlooked and disdained, an underclass of hopelessness. Trump supporters vote for him not because they genuinely believe he’ll fix a broken system but because they think he’s standing with them in protesting against it. To the point of wrecking it.

Treasurer Jim Chalmers: “It’s pleasing to see the progress we are making in getting inflation down and wages up.”Credit: Alex Ellinghausen

Australia is far from America, but it’s been trending in the same direction. Systemic change is needed. Housing is a pressing example. A Per Capita research paper due next week makes this striking measurement of government housing support: “In 2023-24, federal government tax breaks for property investors will be worth more than 11 times the amount spent by the federal government on all social housing and homelessness services.”

“So it’s a clear comparison between what we give to people to allow them to acquire more assets at the expense of what we give to people to keep a rented roof over their heads,” concludes Dawson.

The Albanese government has a suite of policies designed to correct some of the glaring inequity in Australia’s system. Next week’s mid-year update from Treasurer Jim Chalmers will show that housing has been allocated multi-billions in new support, just in the past seven months, for social and affordable housing.

Dawson gives the government credit for “smart, well-targeted measures to reduce the cost of living”. Its wages and workplaces policies, including those passed by parliament this week, are making a difference. Real wages, long in decline, have started to head up in the last two quarters as a result.

Chalmers says “we see in the wages data that our bottom-up approach to wages growth is working, and our cost of living measures are helping too. Long way to go, but it’s pleasing to see the progress we are making in getting inflation down and wages up and that’s how we make it easier for people doing it tough.”

How does all of this affect the big picture? On the biggest measure of how income is divided in Australia, the share going to workers peaked in the 1970s and has been sliding pretty much ever since.

This metric, the so-called labour share of GDP, stood at 55 per cent in the late ’70s. Last year it was under half – 49.8 per cent. While the profit share went up, doubling from 16 per cent in the 1970s to last year’s 32 per cent. This represents a vast, long-term reallocation of national income from people to corporations.

But this year, there has been a rare revival of the labour share of the national earnings, back over 50 per cent to 52 per cent. While the profit share eased back to 30.6. “A good story for Jim Chalmers,” says Dawson.

The Albanese government can take credit; the pendulum may have started to move back towards fairness and away from American hopelessness. But, as Chalmers acknowledges, there is a very long way to go as real household disposable incomes continue to slump.

And Emma Dawson points to the huge intergenerational transfer of wealth that is about to occur as the Boomer generation bequeaths its housing wealth to its kids, potentially entrenching a stark divide of haves and have-nots.

“Generationally, things are really dire,” says Dawson, “but it’s not irreversible – we are at a tipping point. The government’s been tinkering with a broken system.” It’s a task for an Atlas, but Archimedes showed that even a mortal can move the world if he or she has a lever long enough and a place to stand.

In the meantime, Jacqui Lambie has a year-end cheerio for the government: “If they gave a shit they’d fix the ACCC [to impose tougher competition laws] – and that’s just for our groceries.”

And she has one for big businesses, which has been dining out on the profit share of national income in recent times at the expense of workers: “Quite frankly, you should be ashamed of yourselves. Merry Christmas to you!”

Peter Hartcher is political editor.