Business council applauds Labor on living wage

The Business Council of Australia has backed federal Labor’s ‘living wage’ proposals.

Bill Shorten tours the Tooheys Brewery in Sydney yesterday. Picture: AAP

The Business Council of Australia has backed federal Labor’s “living wage” proposals, splitting from rival employer groups which warned the proposal risked jobs growth and the viability of companies operating on low margins.

BCA chief executive Jennifer Westacott said the opposition had “listened to employers” by taking “sensible steps” to have the policy implemented through phased-in pay increases determined by the “independent” Fair Work Commission.

“Full-time workers deserve a wage that allows them to support themselves; they also need the jobs that only thriving businesses can create,’’ she said. “An independent umpire is the best way to balance these demands.”

But the Australian Industry Group and the Australian Chamber of Commerce and Industry slammed Labor’s proposals for the commission to award higher pay rises for workers on the national minimum wage without automatically flowing them through the award system.

Mr Shorten said a new living wage, identified as 60 per cent of median earnings, would not “automatically flow” through to an estimated 2.3 million award-reliant workers.

He said lifting the minimum wage would stimulate economic growth. “We get that you’ve got to roll this out in a way which recognises the capacity of business to pay,” Mr Shorten said.

“So this is not a crash-through-or-crash approach to wages, not the scaremongering we get from these lazy dilettantes in governments who don’t care about wages growth.”

Labor estimates about one in 10 workers, or 1.2 million, would be affected, including 180,200 on the adult national minimum wage, about 600,000 who are not paid exactly at the award rate, and those on junior, apprentice and disability rates of pay.

Forty-five of the nation’s 122 awards include workers who are paid the national hourly minimum wage of $18.93 an hour. Workers paid the lowest rate include employees working at restaurants, licensed clubs, veterinary clinics, dry cleaners and funeral parlours.

Industries that employ national-minimum-wage workers include horticulture, meat, seafood, textile, clothing and footwear, gardening and landscaping, sugar and timber.

A two-tiered approach was rejected by the Fair Work Commission in last year’s minimum wage decision when the Australian Catholic Council of Employment Relations proposed lifting the national minimum wage by $40 a week with smaller rises for higher award rates. “There is no justification to increase the (national minimum wage) by a higher rate than modern award minimum wages (as proposed by ACCER),’’ the commission said.

“To do so would create a significant risk of disemployment effects, thus putting low-paid workers at risk of unemployment and ­poverty.”

Australian Industry Group chief executive Innes Willox said the policy would have “perverse impacts” on the labour market and should be “taken back to the drawing board”.

Australian Chamber of Commerce and Industry chief executive James Pearson said the policy, if implemented, would force many businesses to choose between cutting the hours of employees or laying people off.

ACTU secretary Sally McManus said the policy was a “fantastic first step”, insisting it would benefit business and ensure no full-time worker lived in poverty.