Labor MP no hero of working class

Illustration: Sturt Krygsman

If anyone in federal parliament should be anxious about jobs it’s the Member for Wakefield, a distressed South Australian electorate in a destitute state.

One in 10 of Nick Champion’s working-age constituents are on Newstart and 1400 jobs will be lost later this year when the Holden plant in Elizabeth ceases production. Ten per cent claim the Disability Support Pension, the dignity-destroying benefit that deems you physically or mentally incapable of working, full stop.

Wakefield’s 160,000 residents claim 120,000 separate benefits payments between them, excluding the Age Pension. Six per cent of households receive the single parent payment; one in six collects either the Carer Allowance or Carer Payment; and 12 per cent of the population have a Health Care Card.

Which makes it somewhat curious that Champion didn’t celebrate the Fair Work Commission’s employment-stimulating decision to cut weekend penalty rates.

Unusually, the commissioners have made a judgment that will encourage economic growth, one that will create wealth rather than merely redistribute it. It will allow more businesses to open for longer and employ more staff. It will necessarily help those at the bottom of the ladder in Wakefield by offering more hours of lower-skilled employment.

You would have expected Champion to be thumping out press releases to the Northern Messenger welcoming the win for Williamstown and the hope it brings for the unwaged of Angle Vale. Not a bit of it.

“I’m in the Labor Party,” Champion told Sky News last week. “My job is to advance the wages and conditions of working people.”

It is rare to hear a Labor politician talk so frankly about his party’s true interests. Labor is the party of jobs, but only for those who have got them. In so far as it can claim to be the party of the workers, it is the party of the unionised and those paid from the public purse. And it is, by default, the party of those on benefits, since its instinct is to create more of them. Balanced budgets are matters over which the other mob fret.

Champion, with a communications degree from Australia’s 14th-ranked university, knows a thing or two about economics, or so he would have us believe.

“There is a bucketload of academic research, a bucketload, that shows that reducing wages in a car wash economy does not create a single job,” he told Kieran Gilbert. “And there is plenty of academic research from the US and from Britain that shows that if you increase wages and conditions you increase work.”

Fair Work Commission president Iain Ross might have an AO after his name and might have been appointed by Bill Shorten, but in this case “he was wrong”, Champion said. The government should overturn his ruling.

Craig Laundy, his Liberal interlocutor, looked incredulous. Perhaps, he ventured mischievously, Labor would like to go further and increase penalty rates.

“Well, that wouldn’t be a bad thing would it?” said Champion.

In fact, a mandated pay rise without reference to productivity is the very last thing small and medium businesses need. Coles, Woolies and Maccas could cope. They’re big enough to deal with unions directly and negotiate penalty rates away. For the coffee shop owner in Gawler or the grocery store in Kapunda, it’s a different matter.

The Productivity Commission certainly thinks so. Penalty rates have a legitimate role in compensating for long or asocial working hours but weekend penalty rates for retail and hospitality sectors were inconsistent and anachronistic. Sunday bonuses “frustrate the job aspirations of the unemployed and those who are only available for work on Sunday”, the Productivity Commission concludes in an examination of workplace regulations in late 2015.

Double pay on Sundays, and even more on public holidays, eats into the profitability of business on the margins.

The big businesses Labor likes to hate, with their expensive automated payroll systems and separate enterprise agreements, can deal with this stuff.

The community cafes and shops that enhance our Sunday morning strolls cannot. Least of all in South Australia where, quaintly, all Sundays are deemed public holidays. Even if by tacit agreement, it is a clause most employees and employers overlook.

Running any small retail facing business can’t be fun in South Australia, the state with the least reliable and most expensive electricity in the country. Shops, restaurants and cafes lost tens of millions of dollars in business and wasted fresh food in the three power cuts since September. The local economy is hurting badly.

The correct response of government in such circumstances should be to create a climate in which businesses can flourish. Deregulation, lower taxes and better infrastructure should be its goal.

Labor’s reaction to the Fair Work Commission’s decision betrays a party intent on doing the opposite. It wants to regulate the regulators and cries crocodile tears for the pauperised while showing no interest whatsoever in getting them back to work.

The Fair Work Commission’s decision barely begins to tackle the mountain of nuisance taxes and directives from on high that penalise businesses for giving people jobs.

There is a strong argument — if anyone in politics was bold enough to make it — that penalty rates have no place in the safety net administered by the commission. They should be negotiated between employees and employers, if indeed they should apply at all.

Perhaps we should also ask, incidentally, why the National Employment Standards include mandatory long service leave, an Australian anachronism that serves only to nurture nostalgia for 19th-century sail boats to ­Europe and to the weight of compliance.

Australian workers are among the best protected in the world. They enjoy the benefits of an exceptionally high minimum wage and a progressive tax system that demands no net tax from the lowest-paid 25 per cent.

What they lack right now is the sense of job security that only comes in a growing, export-driven economy with the productive capacity to hold its own in the world.

That is not something that can be achieved through welfare or regulated work conditions. It requires an injection of capital and some entrepreneurial spine.

Nick Cater is executive director of the Menzies Research Centre.