The response of enterprise teams and the Coalition to the federal government securing passage yesterday of its identical job, identical pay invoice — laws that can forestall employers from outsourcing jobs to labour-hire corporations that pay contracted staff lower than award charges — was apoplectic.
“Make no mistake,” mentioned the Australian Business Group, “the invoice will damage trade, undermine productiveness and end in fewer job alternatives in addition to increased prices that can probably be handed on to customers.” “The price of residing for tens of millions of Australians will rise, and the job-creation capability of companies can be smothered”, reckoned the Australian Chamber of Commerce and Business. It is going to “impression each enterprise and each employee in Australia”, mentioned the Enterprise Council.
“The Albanese authorities has declared warfare towards the Australian sources sector and weakened Australia’s economic system,” mentioned the Minerals Council. “By dashing controversial office modifications by way of the Senate, the federal government has dramatically elevated the price of doing enterprise in Australia, prices that can undoubtedly movement by way of to customers, within the midst of a price of residing disaster.” “The price of well being will go up, native council charges will rise and it’ll take longer to discover a reduction instructor in your little one’s class,” warned a labour-hire lobbyist.
The Coalition’s Michaelia Money was positively froth-mouthed with fury. “At present is a devastating day for Australians … it is a determined ploy by an embattled authorities to distract Australians from the rolling trainwreck that’s the launched detainees’ disaster. The federal government’s new labour-hire legal guidelines will considerably improve the burden and prices imposed on companies.”
You possibly can see a recurring theme: prices are going to go up for enterprise, and can subsequently push inflation up. However the place will these rising prices come from? Unmentioned by any of the employer teams or the Coalition is why, precisely, they’re so satisfied that it’ll push prices up: as a result of the entire level of the invoice is to forestall employers from underpaying staff in comparison with the enterprise settlement making use of to the job they’re doing, simply by outsourcing to a labour-hire firm.
Reasonably than impression “each employee in Australia”, because the Enterprise Council claims, it’s going to in reality have an effect on round 327,100 individuals — that’s the full variety of labour-hire staff, at June 2023, in response to the Australian Bureau of Statistics (ABS). That’s 2.3% of all staff. The truth is, it gained’t even have an effect on that quantity, as a result of power foyer group the Australian Assets and Power Employers Affiliation satisfied the federal government to exclude what it claimed was real outsourcing, the place one other agency supplied a service, not simply labour, which means a big fraction of that workforce gained’t be affected.
The ABS figures present labour rent, which originated within the mining trade, has steadily expanded lately — since 2014, the variety of staff in labour rent has elevated by greater than a 3rd — which has in all probability performed not less than a small function within the wage stagnation of the previous decade. We’re not precisely speaking about common staff right here — labour-hire staff are decrease paid, extra prone to be from abroad and more likely to have a precarious job. Greater than 1 / 4 are labourers. In keeping with the ABS:
In 2019-20, the median annual earnings (in major job) of individuals employed in labour provide providers was $33,100. Virtually 20% of individuals employed in Labour provide providers earned lower than $10,000 in 2019-20, whereas nearly 10% earned between $60,000 and $80,000.
These are the those who employers don’t wish to pay award or agreed enterprise discount pay charges, as a result of they will faux to “outsource” the work to a labour-hire agency that can underpay them.
Let’s do a tough calculation, erring on the facet of employers: say each single employee within the labour-hire trade will get a whopping $10,000-a-year pay rise because of the laws — a wildly unlikely end result. Meaning employers are up for an additional $3.3 billion a 12 months in wages. Sounds lots! However based mostly on the September quarter enterprise indicators information, Australia’s complete annual wages invoice in the mean time is round $740 billion, which means that will translate into a rise of… lower than half of 1 p.c, even with essentially the most beneficiant potential assumptions.
What the adjustment would do for the probably couple of hundred thousand staff who acquire a number of thousand {dollars} a 12 months is present some much-needed respiratory house given they’re a few of the lowest-paid staff within the nation, the victims of a persistent ploy by employers to get round their obligations to staff by pretending they’re employed contractors, not workers.
Unusually, there’s no point out of that within the hysterical claims of enterprise and the Coalition.
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