THE FEDERAL Government has been accused of trying to bring in a US-style system minimum wages system, under which low-paid Australians would either never get a pay rise or receive much less than they do under the current system overseen by the Australian Industrial Relations Commission (AIRC)
THE FEDERAL Government has been accused of trying to bring in a US-style minimum wage system, under which low-paid Australians would either never get a pay rise or receive much less than they do under the current system overseen by the Australian Industrial Relations Commission (AIRC).
Unions and some employer groups have expressed concerns over proposals by the Federal Government to introduce a system whereby it would handpick an ‘expert group’ from the Government, Treasury or Reserve Bank to set minimum wages. The Federal Government would also have the final say regarding any such expert group’s recommendations.
The expert group proposal is a backdoor way of scrapping the independent wages umpire and giving the Federal Government control over minimum wages, ACTU secretary Greg Combet said.
“The fact is that employer groups and the Government have failed to provide convincing evidence to the Commission that moderate increases in minimum wages cause job losses,”he said.
“Having lost the argument in the AIRC it now seems they want to axe its role in hearing the minimum wage case altogether.”
Minister for Employment and Workplace Relations Kevin Andrews said the AIRC lacks “economic rigour” and has failed to sufficiently consider the impact of wage rises on employment, despite the AIRC having a legal requirement to consider the employment and economic impact of its decisions.
More than 80 per cent of the AIRC’s 100-page finding in last year’s wage case was devoted to the state of the economy and consideration of the possible employment impact of a wage increase.
The Federal Government hit back at the ACTU’s claims, asserting that Australia has the highest minimum wage compared to median earnings, as well as in terms of purchasing power, in the OECD.
“The Howard Government is committed to maintaining the minimum wage and ensuring it is increased in such a way that every Australian is guaranteed of a fair wage,” Minister Andrews said.
“However, it must also be acknowledged that a minimum wage that is set too high has the unintended consequence of diminishing the employment prospects of the low skilled and unemployed.”
Employer groups generally supported the Federal Government’s proposals.
The Australian Industry Group called for the establishment of a new body comprised of multidisciplinary experts to advise the AIRC on future safety net increases.
The Business Council of Australia said that minimum standards and minimum wage increases should be determined by a minimum wage board or committee, which would then be required to make recommendations to the Federal Government for their approval.
“This board or committee would need to be comprised of individuals with significant economic expertise and an appreciation of the employment market and factors influencing people’s employment prospects to guide the determination of minimum wage increases,” the council said.
A key factor influencing the determination of minimum wage increases should be the employment prospects of the unemployed, taking into consideration the ability for enterprises to be exempt from awards or certain provisions of awards, the council added.
