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Category Archives: minimum wage rates and awards

Posted 8 hours 31 minutes ago

A major welfare group says the Fair Pay Commission is using inaccurate information on the cost of living when setting the minimum wage.

The head of Catholic Social Services, Frank Quinlan, says the Commission uses a formula that underestimates the true cost of housing and over-estimates government rent assistance to low-income earners.

He says the data is up to $90 a week out.

“The Federal minimum wage, far from providing a safety net for low-paid employees, might be significantly underestimating their cost of living and therefore placing people under significant hardship,” he said.

“On a federal minimum wage of something like $540 per week, people who are dependent on this income – often single parents with one or two children – might be $60 or $70 worse off than they should be.”

The Fair Pay Commission says it is aware of the concerns, but will not comment while it is considering whether to increase the minimum wage.

Ewin Hannan | April 07, 2009
Article from: The Australian

EMPLOYERS claim to have extracted key concessions they believe will reduce many costs associated with the revamp of the nation’s award system.

The Australian Industry Group said last night a decision by the full bench of the Australian Industrial Relations Commission had addressed many concerns about the proposed “modernisation” of awards.

AIGroup chief executive Heather Ridout said business had been concerned the award revamp would result in big cost increases for employers. But 27 new awards and two amended modern awards, released by the commission, contain changes business believes will benefit companies.

Under the revamped clerical award, higher-paid employees will be excluded from most award provisions. It also contains separate flexible and cost-competitive conditions for in-house call centres.

The new banking, finance and insurance award includes lower penalty rates and more provisions on flexible hours for employees of call centres.

A modern contract call centre industry award has been made with flexible and cost-competitive conditions rather than contract call centre companies being forced to apply the modern awards of their clients, as originally proposed.

Ms Ridout said the revamped modern graphic arts award had not been extended to cover the industries of web design and development, as sought by the unions.

She said separate awards had been made for general transport, long-distance operations and the cash-in-transit industry, which did not incorporate the union’s “costly wage proposals”.

“Award modernisation is a massive and extremely complex task, with very tight timeframes,” Ms Ridout said.

She commended the commission’s consultations.

Article from: Sunday Herald Sun

March 29, 2009 12:25pm

THE Australian Fair Pay Commission needs to think about the effect a minimum wage boost would have on employment, Julia Gillard says.

Ms Gillard, who is also the Employment and Workplace Relations Minister, says the global financial crisis needs to be considered with any wages decision.

“We’ve said the biggest thing that we think should be on the Fair Pay Commission’s agenda at this difficult time is the question of jobs,” Ms Gillard told ABC TV on Sunday.

“There is obviously a relationship between minimum wages and employment.

“But the point that we have made is that in a slowing economy there is more reason to be concerned about the nexus between wages and employment.

“We’ve put that point squarely before the Fair Pay Commission.”

The ACTU wants a $21 per week pay increase for low-paid workers to cope with cost of living pressures, but business wants something sharply below that or even nothing.

The government wants the Australian Fair Pay Commission to take into account cash handouts paid to low-income workers from its two economic stimulus packages.

Ms Gillard acknowledged that low-income earners were doing it tough.

“For low-income Australians, obviously people who work on minimum wages are people who are under financial pressure,” she said.

The commission is due to announce its decision in July.

Patricia Karvelas and Ewin Hannan | March 24, 2009
Article from: The Australian

THE Rudd Government has rebuffed a union push for a $21-a-week minimum wage rise, warning that an excessively large increase would lead to job losses and burden small business during the economic crisis.

Employment Minister Julia Gillard and Treasurer Wayne Swan yesterday declared a big rise now would put vulnerable, low-skilled employees out of work.

Contradicting the ACTU’s argument that a wage rise now would stimulate the economy, the Government said minimum-wage increases were best used to protect the low-paid rather than as a macroeconomic stimulus.

Meanwhile, Remuneration Tribunal president John Conde has written to federal judges warning them not to expect hefty pay increases this year in view of the tough economic times.

While declining to nominate a specific dollar amount in its submission to the Fair Pay Commission, the Government said it supported a “considered rise in the low-income safety net, mindful of significant challenges facing the domestic economy”. It urged the commission to make employment its primary consideration.

The ACTU is seeking to increase the minimum wage from $543.78 a week to $564.78 a week, a rise of 3.86 per cent. According to union costings provided to the commission, the ACTU said awarding its claims would add a “negligible” 0.3 per cent to ordinary-time earnings and have a “barely measurable” CPI impact of 0.16 per cent.

ACTU secretary Jeff Lawrence yesterday attacked the commission chairman Ian Harper, claiming he was “not impartial”.

Professor Harper recently reaffirmed there was a negative relationship between employment and minimum wages, and he would consider the impact of the Government’s cash handouts and tax cuts on the low paid.

Mr Lawrence said his comments were unacceptable and did not give the unions “any confidence the process is balanced”. Mr Lawrence said the “moderate” $21-a-week increase would help low-paid workers suffering from the increased cost of living and would help stimulate the economy during the downturn.

But the Government lent weight to Professor Harper’s comments, cautioning the commission that employment levels could fall further if minimum wage increases were substantial in a slowing economy.

The Government acknowledged that increases in the minimum wage boosted wages for some workers, “which may flow through to increased household spending and thereby support jobs”.

However, “higher wages also raise labour costs for employers, which may result in a reduction in demand for the low-paid and could put upward pressure on consumer prices”.

“As such, minimum wage increases are best targeted as an important means of protecting the low-paid rather than as macroeconomic stimulus,” it said.

Mr Lawrence said tax cuts should be complementary to minimum wage increases, while the commission should not take into account one-off cash bonuses because they were designed to create extra spending to boost economic activity.

But the Government urged the commission to take into account scheduled tax cuts for the low-paid.

The influential Australian Industry Group yesterday split from employers advocating a wage freeze and supported an increase in the minimum wage by $8 a week. It also urged the Government to increase the low-income tax offset from $1200 to $1500 and raise the tax threshold at which the marginal tax rate of 30 per cent cuts in from $34,000 to $37,000.

Heather Ridout, the AIG’s chief executive, warned that the ACTU claim would “hurt the low-paid by reducing their employment security and potentially shutting many unemployed out of the workforce”.

The Australian Chamber of Commerce and Industry called for pay rises for low-paid workers to be delayed, claiming the union demand would cost $1.7 billion.

“Just at the moment, an economy-wide wage rise across 1.3 million employees and 250,000 small and medium businesses is neither the smart thing to do, nor the right thing to do,” the chamber’s chief executive, Peter Anderson, said.

“With the economy not growing, the case for wages to be increased by government regulation is very weak.”

The Australian Retailers Association said awarding the union claim would cost jobs. “The unions are stuck in old world thinking and need to be far more conscious of saving jobs, rather than putting pressure on employers to pay more,” the association’s executive director, Richard Evans, said. “We are in unique financial times and need to show caution.”

In its submission, the Government argues that planned tax cuts and one off payments given out in the stimulus package are already giving low income earners support at a time they need it.

“During a period of relatively weak labour demand, an excessively large minimum wage increase could reduce the capacity of low-skilled workers to maintain and obtain employment,” the submission says.,25197,25232848-601,00.html