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  • A Better Future for Self-Employment

    Gig Economy, Employment & Unemployment

    A Better Future for Self-Employment

    How is it changing, and how can ‘gig’ work be regulated?
    by David Peetz

    Author

    David Peetz

    Laurie Carmichael Distinguished Research Fellow

    Media release



    New Report Reveals Changing Face and Future of Self-Employment

    This report considers and challenges two common myths about self-employment.

    The first is that self-employment is inexorably growing. The second is that self-employment cannot, or should not, be regulated in order to protect self-employed workers and improve the conditions of their work.

    This new report from the Carmichael Centre at the Centre for Future Work shows that, in reality, self-employment is not growing inexorably — in fact, in most countries (including Australia) it is declining.

    The much-trumpeted surge in self-employment and ‘freelancing’ is a myth. However, the nature of self-employment is changing: fewer self-employed people are running successful independent businesses, and more are engaged in precarious ‘solo’ activities like short-term contracting and part-time ‘gig’ work.

    The report also shows that some forms of self-employment can be regulated to protect affected workers, provided two simple and important criteria are satisfied: the workers are vulnerable and hence need protection, and a viable mechanism exists that enables their work to be efficiently regulated.

    The report reviews the proposed provisions of the second part of the federal government’s new Closing Loopholes legislation, which would allow for minimum labour standards to be applied to digital platform workers and owner-operators in the transportation sector. The new legislation (to be considered in Parliament in 2024) is an appropriate and effective response to the challenges facing these two groups of ‘gig’ workers.

    Please see the full report, “A Better Future for Self-Employment: How is it changing, and how can ‘gig’ work be regulated?,” by David Peetz, Laurie Carmichael Distinguished Research Fellow at the Centre for Future Work.



    Full report




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    New Report Reveals Changing Face and Future of Self-Employment

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  • The Stage 3 tax cuts will make our bad tax system worse

    The Stage 3 tax cuts will make our bad tax system worse

    by Jim Stanford in The Conversation

    Jim Stanford

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    Originally published in The Conversation on December 11, 2023

    Australia has one of the weakest tax systems for redistribution among industrial nations, and as Dr Jim Stanford writes, the Stage 3 tax cuts will make it worse.

    One of the chief purposes of government payments and taxes is to redistribute income, which is why tax rates are higher on taxpayers with higher incomes and payments tend to get directed to people on lower incomes.

    Australia’s tax rates range from a low of zero cents in the dollar to a high of 45 cents, and payments including JobSeeker, the age pension, and child benefits which are limited to recipients whose income is below certain thresholds.

    In this way, every nation’s tax and transfer system cuts inequality, some more than others.

    Which is why I was surprised when I used the latest Organisation for Economic Cooperation and Development (OECD) data to calculate how much.

    The OECD measures inequality using what’s known as a gini coefficient. This is a number on a scale between zero and 1 where zero represents complete equality (everyone receives the same income) and 1 represents complete inequality (one person has all the income).

    The higher the number, the higher the higher the inequality.

    Australia is far from the most equal of OECD nations – it is 21st out of the 37 countries for which the OECD collects data, but what really interested me is what Australia’s tax and transfer system does to equalise things.

    And the answer is: surprisingly little compared to other OECD countries.

    Australia’s system does little to temper inequality

    The graph below displays the number of points by which each country’s tax and transfer system reduces its gini coefficient. The ranking indicates the extent to which the system equalises incomes.

    The OECD country whose system most strongly redistributes incomes is Finland, whose tax and transfer rules cut its gini coefficient by 0.25 points.

    The country with the weakest redistribution of incomes is Mexico which only cuts inequality by 0.02 points.

    Australia is the 8th weakest, cutting inequality by only 0.12 points.

    Apart from Mexico, among OECD members only Chile, Costa Rica, Korea, Switzerland, Türkiye and Iceland do a worse job of redistributing incomes.

    What is really odd is that, before redistribution, Australia’s income distribution is pretty good compared to other OECD countries – the tenth best.

    It’s not that Australia’s systems don’t reduce inequality, it’s that other country’s systems do it more.

    Of the OECD members who do less than Australia, four are emerging economies: Chile, Costa Rica, Mexico, and Türkiye. Like most developing countries, they have low taxes, weak social protections and poor tax-gathering systems.

    Indeed, in Chile and Mexico, taxes and transfers do almost nothing to moderate extreme inequality.

    The other three countries ranked below Australia – Iceland, Switzerland, and South Korea – boast unusually equal distributions of market incomes. Each is among the four most equal OECD countries by market income, and each is considerably more equal than Australia.

    Australia ‘less developed’ when it comes to redistribution

    This makes Australia’s weak redistribution system more typical of a low-income emerging economy than an advanced industrial democracy.

    Even Canada, the United States, the United Kingdom and New Zealand do a better job of redistributing income than Australia.

    This new data enhances concerns about the impact of planned Stage 3 tax cuts. By returning proportionately more to high earners than low earners these will further erode the redistributive impact of Australia’s tax system.

    It also highlights the consequences of Australia’s relatively weak payments programs, including JobSeeker which on one measure is the second-weakest in the OECD. It’s an understatement to say we’ve room for improvement.


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    Commonwealth Budget 2025-2026: Our analysis

    by Fiona Macdonald

    The Centre for Future Work’s research team has analysed the Commonwealth Government’s budget, focusing on key areas for workers, working lives, and labour markets. As expected with a Federal election looming, the budget is not a horror one of austerity. However, the 2025-2026 budget is characterised by the absence of any significant initiatives. There is

  • Higher exports prices improve the budget, but the Stage 3 tax cuts remain the wrong tax at the wrong time

    Higher exports prices improve the budget, but the Stage 3 tax cuts remain the wrong tax at the wrong time

    by Greg Jericho in The Guardian

    Greg Jericho

    Chief Economist

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    Originally published in The Guardian on December 14, 2023

    As the Budget outlook improves, with most of the benefits of Stage 3 tax cuts going to those earing over $120,000, over 80% of workers will be short-changed

    Yesterday’s mid-year economic and fiscal outlook (MYEFO) provided some pleasing news for the Treasurer, Jim Chalmers. But higher revenue does not mean a stronger economy nor that households are better off.

    While the Treasurer was releasing the latest budget numbers the annual figures for median earnings were released by the Bureau of Statistics.

    These figures showed that the median weekly earnings in August this year were $1,300 – a rise of 4.2% from last year, which was less than the 5.4% increase in inflation.

    That weekly amount translates to $67,600 in annual earnings.

    People earning that amount will get just $565 from the Stage 3 tax cuts (0.8%) while someone on $200,000 – well in the top 10% of earners will get a 4.5% cut worth $9,075.

    The Treasurer told ABC 730 on Wednesday night that the government has not changed its position on Stage 3 and that “We think there is an important role for returning bracket creep where governments can afford to do that.”

    The problem is the Stage 3 cuts are mostly focused at rewarding those on high incomes, who are least affected by bracket creep.

    If the Government was truly worried about using the bonus revenue from higher export prices to assist low and middle-income earners it would care more about those on the median income of $66,700 than those in the top tax bracket and top 10% of income.


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    Commonwealth Budget 2025-2026: Our analysis

    by Fiona Macdonald

    The Centre for Future Work’s research team has analysed the Commonwealth Government’s budget, focusing on key areas for workers, working lives, and labour markets. As expected with a Federal election looming, the budget is not a horror one of austerity. However, the 2025-2026 budget is characterised by the absence of any significant initiatives. There is

  • Paying for Collective Bargaining

    Paying for Collective Bargaining

    by Jim Stanford

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    Recent labour law reforms in Australia have focused attention on the crucial role played by collective bargaining in achieving higher wages, safer working conditions, and better job security.

    New provisions contained in both the Secure Jobs Better Pay (2022) and Closing Loopholes (2023) legislation will expand the scope for collective bargaining (including more opportunities for bargaining at a multi-employer level), make it harder for employers to evade collective bargaining, and empower union delegates to fulfil their responsibilities in workplaces to administer and enforce collective agreements.

    However, one important challenge for Australia’s collective bargaining system, that has not been addressed by these reforms, is how to pay for collective bargaining. The infrastructure of representation, bargaining, implementation and enforcement requires ongoing commitment of people and resources, from both the union and the employer sides of the relationship.

    In Australia at present, the workers’ side of this infrastructure is dependent on voluntary union dues contributed by individuals who choose to join a union in their industry. No collective system of union security or dues collection (such as closed or agency shop arrangements, dues preferences, or bargaining fees) are presently allowed under Australian law. Moreover, Australian law fully protects the ability of individual workers to ‘free ride’ on the benefits and protections negotiated by unions in their workplace: every provision of a collective agreement must be provided to all workers in a defined bargaining unit (whether they are members of the union that negotiated them or not). From a perspective of narrow self-interest, this system discourages union membership — and in turn starves the collective bargaining system of the resources it needs to be viable.

    In this article published in The Conversation, Centre for Future Work Director Jim Stanford discusses the nature of this ‘free rider problem,’ and highlights how the treatment of this problem varies wildly between business and union applications. Legal contracts which enforce collective revenue solutions to free-rider problems are common and fully acceptable in many common applications: such as residential strata arrangements, the governance of joint stock corporations, and even government tax collections. Where unions are concerned, however, the law prevents workers from making and enforcing a collective decision to jointly fund the apparatus of collective bargaining, to the shared detriment of workers who consequently cannot exercise collective bargaining power to improve their employment relationship. The rhetoric of ‘individual choice’ is applied selectively to industrial relations; no owner of a strata unit, or shareholder in a corporation, has the ‘free choice’ to refuse to pay the normal costs and obligations associated with those arrangements.

    Australia’s restrictions on union security and collective dues arrangements are uniquely restrictive among industrial countries; they are similar to the rules in so-called ‘right-to-work’ states in the U.S., where union representation has fallen to the low single digits. Free riding has been an important factor in the long-term erosion of union density in Australia: most recent data indicates that just 12.5% of employees in Australia are presently union members. Workers with greater awareness of the importance of collective bargaining to their long-term prosperity will support their unions, even though they are legally entitled to all the benefits of a collective agreement whether they join or not. But the current laws discourage this act of collective solidarity, and collective bargaining has been eroding accordingly. At present just 15% of workers in Australia are covered by an active enterprise agreement (and less than 10% in the private sector). The erosion of collective bargaining has contributed to wage stagnation, growing inequality, and job insecurity.

    Dr Stanford’s Conversation article has been selected for inclusion in the new anthology, 2023: A Year of Consequence, published by Thames & Hudson, and edited by Justin Bergman (International Editor of The Conversation). The book contains several essays published by The Conversation in 2023 that are judged to have contributed most to public policy dialogue in Australia over the past year.

    Further information on the extent and consequences of free riding in Australian collective bargaining, and five different strategies for addressing this problem (based on the variety of policies implemented in other industrial countries where collective bargaining is better-resourced, and hence stronger and more effective), are provided in Dr Stanford’s recent scholarly article in Labour and Industry, titled “International approaches to solving the ‘free rider’ problem in industrial relations.” Click below to see the full article.


    Related documents



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    Related research



    Submission to the Senate Education and Employment Legislation Committee Inquiry into the Fair Work Legislation Amendment (Closing Loopholes) Bill 2023



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    Collective Bargaining and Wage Growth in Australia



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  • Solidarity Research for Union Renewal

    Solidarity Research for Union Renewal

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    A Symposium of Researchers and Trade Unionists co-hosted by the Centre for Future Work and Unions WA.

    • Tuesday 30 January 2024
    • 5:30pm for 6pm start
    • UnionsWA, CSA Building, 445 Hay Street Perth

    To coincide with the Association of Industrial Relations Academics of Australia and New Zealand (AIRAANZ) holding its 2024 conference in Perth, the Centre for Future Work and Unions WA are pleased to present a unique and important event for union members, supporters, and activists.

    ‘Solidarity research for Union Renewal’ brings together cutting-edge researchers and unionists to share their knowledge and wisdom about renewing unions and building solidarity between all workers. Find out how:

    • Canadian Health Workers restored their jobs to the public sector
    • African unions have fought back against Multinationals
    • Australian unions are organising and advocating for migrant workers

    The evening will be chaired by Professor Emeritus David Peetz, the Laurie Carmichael Distinguished Research Fellow at the Centre for Future Work – who will also be presenting his research on Developing Union Delegates

    This event is FREE, with refreshments, but we need you to register for a ticket here: https://www.unionswa.com.au/solidarity_research_for_union_renewal.

    And here is the full program of speakers and topics.

    See you in Perth!


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    Centre For Future Work to evolve into standalone entity

    The Centre for Future Work was established by the Australia Institute in 2016 to conduct and publish progressive economic research on work, employment, and labour markets. Supported by the Australian Union movement, the centre produced cutting edge research and led the national conversation on economic issues facing working people: including the future of jobs, wages

  • Short Changed

    Labour Standards & Workers’ Rights

    Short Changed

    Unsatisfactory working hours and unpaid overtime.
    by Fiona Macdonald

    Author

    Fiona Macdonald

    Acting Director, Centre for Future Work

    Media release



    Employers Steal More than 280 Hours from Workers Each Year: Go Home on Time Day Report 2023

    This year marks the fifteenth annual Go Home on Time Day (GHOTD), an initiative of the Centre for Future Work at the Australia Institute that shines a spotlight on the maldistribution of working hours and the scale of unpaid overtime worked by Australians.

    Following the disruptions of the COVID pandemic and historic falls in real wages over recent years, 2023’s stronger labour market conditions should benefit many workers. Wages have risen, labour force participation is relatively high and unemployment is low. With the introduction of the Government’s 2022 industrial relations reforms, workers are in a better position to bargain, as shown in recent bargaining outcomes and improving wages growth. However, wages are not keeping up with prices, inflation is high and, for many workers, conditions of work are far from satisfactory.

    As this year’s GHOTD report shows, significant problems of overwork and underemployment co-exist, affecting many workers across all industries, occupations and age groups. Underemployment particularly affects workers in casual, temporary and other forms of insecure work, and it particularly affects workers in lower-paid roles. Women, younger workers, older workers and services workers are over-represented among those affected. At the same time long hours and overwork remain a problem, especially for full-time workers.



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  • Employers Steal More than 280 Hours from Workers Each Year: Go Home on Time Day Report 2023

    Employers Steal More than 280 Hours from Workers Each Year: Go Home on Time Day Report 2023

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    Despite record-low unemployment, Australian employers are still managing to steal more than 280 hours from their employees each year.

    That’s the finding of the Australia Institute’s 2023 report, Short Changed, tracking annual work hours and unpaid overtime for Go Home On Time Day on November 22. It has also found the average worker is losing out on $11,055 a year, or $425 a fortnight, to unpaid overtime.

    Key findings:

    The Australia Institute surveyed 1,640 people between August 29 and September 6. Of those, 61% were in paid work. 

    • Employees reported doing an average of 5.4 hours of unpaid work a week overall
      • Full-time employees perform an average of 6.2 hours, and casuals or part-timers four hours
      • Workers aged 18 to 29 do the most unpaid overtime (7.4 hours) a week
    • This ‘time theft’ equates to 281 hours a year or seven standard 38-hour weeks spent working for free
    • Australian employees are losing a cumulative $131 billion to unpaid work a year
    • Nearly half (46%) are not satisfied with the amount of paid work they’re doing and either want more or fewer hours:
      • A third of all workers want more paid hours (35%), but this rises to 54% for under-30s
      • Half of casuals (49%) of two in five part-timers (40%) would like more paid hours
      • Another 11% of all workers would like fewer paid hours

    “This survey shows just how uneven the labour market is. We’ve got many workers, especially casuals in insecure jobs, wanting more hours. At the same time, employers are more likely to demand long hours, including large amounts of unpaid overtime, from full-time workers,” Dr Fiona Macdonald, Policy Director, Industrial and Social at the Centre for Future Work said.

    “Record-low unemployment should have pushed both satisfaction with working hours and paid hours higher as employers scrambled to fill labour shortages. Instead, ‘time theft’ has actually blown out by 57 hours per worker since 2022 and has returned to near pandemic-era levels.

    “This dispels simplistic arguments that workers have the upper hand on employers because of recent industrial relations reforms. In fact, we’ve seen workers agree to more hours due to the cost of living crunch. Perversely, this has resulted in employees giving their bosses a free kick because many of those hours end up being unpaid.

    “Providing more protections for workers in these insecure positions, as proposed in the Closing Loopholes legislation currently before parliament, is an important priority for improving Australian labour market outcomes.”

    Visit Go Home On Time Day 2023 to read more and use our online calculator to work out your unpaid overtime.


    Related research



    Short Changed



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  • After two years of profit-led inflation, workers deserve the pay rises they are getting

    After two years of profit-led inflation, workers deserve the pay rises they are getting

    by Greg Jericho in The Guardian

    Greg Jericho

    Chief Economist

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    Originally published in The Guardian on November 16, 2023

    The wage rises for low-paid workers on awards and those working in aged care helped drive the strong wage growth.

    The latest wage growth figures showed that workers’ wages for the past six months have grown faster than inflation. As Labour Market Policy Director, Greg Jericho writes in his Guardian Australia column, this should be celebrated. We need to shed our fear of wage rises. For too long any sign of increasing wage growth has been viewed as something to be stomped on while ever-increasing corporate profits have been cheered.

    Since the start of the pandemic, workers’ purchasing power has crashed, and the only way to recover the lost real wages is through wages increasing faster than inflation.

    The 1.4% growth of private-sector wages in the September quarter was driven largely off the back of the Fair Work Commission’s decision to increase Award wages by 5.75% and the decision to give aged-care workers a 15% pay rise.

    As a result around 40% of those who gained a pay rise in the September quarter received one greater than 4%.

    One other pleasing sign has been the relaxation of public sector wage caps has allowed those workers around the country to get a fairer pay rise, but their increases remain well below that of the private-sector.

    The profit-led inflation since 2021 hurt workers, and it now is only fair that they receive some recompense. After a decade of ever falling wage growth and a pandemic and recover that smashed real wages, it is very good news that workers are finally getting their fair reward.


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    Centre For Future Work to evolve into standalone entity

    The Centre for Future Work was established by the Australia Institute in 2016 to conduct and publish progressive economic research on work, employment, and labour markets. Supported by the Australian Union movement, the centre produced cutting edge research and led the national conversation on economic issues facing working people: including the future of jobs, wages

  • The Government needs to act on Stage 3 as the RBA warns about wealthy households spending

    The Government needs to act on Stage 3 as the RBA warns about wealthy households spending

    by Greg Jericho in The Guardian

    Greg Jericho

    Chief Economist

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    Originally published in The Guardian on November 9, 2023

    The RBA made it clear one group continues to do well, and continue to spend – and they are also the ones who are about to get a massive tax cut.

    The Reserve Bank’s decision to raise interest rates on Tuesday lacked any clear reasoning.

    When compared with other periods such as during the mining boom, when household spending was growing fast and real wages were surging, we can see that the economy at the moment is much weaker. Households are now cutting back on luxuries as their real wages fall.

    But the RBA pointed out that one group of Australians are doing OK – those with high income and wealth. Those with large savings buffers and who are also enjoying the increased wealth from rising house prices are still spending.

    This is also the group who are about to be handed the biggest income tax cut in history. The Reserve Bank has made it clear that allowing Stage 3 to go forward in its current form will only fuel inflation and likely result in higher interest rates for all.

    With a Reserve Bank desperate to use any excused to raise rates and slow the economy even as it already slows, the Government needs to amend the Stage 3 cuts to deliver greater benefit to low-middle income households who have suffered the most from the rising cost of living and interest rates, and less to those who are already doing well and for whom a potential $9,075 tax cut would just put more fuel on the inflation fire.


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    Centre For Future Work to evolve into standalone entity

    The Centre for Future Work was established by the Australia Institute in 2016 to conduct and publish progressive economic research on work, employment, and labour markets. Supported by the Australian Union movement, the centre produced cutting edge research and led the national conversation on economic issues facing working people: including the future of jobs, wages

  • When the prices of necessities are rising fast, the RBA does not need to hit households with another rate rise

    When the prices of necessities are rising fast, the RBA does not need to hit households with another rate rise

    by Greg Jericho in The Guardian

    Greg Jericho

    Chief Economist

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    Originally published in The Guardian on November 2, 2023

    Cost of living rose by more than inflation because of interest rate rises. Another rate rise would only cause more unnecessary pain.

    In the past week, the likelihood of the Reserve Bank raising the cash rate to 4.35% has gone from about 20% prior to last week’s inflation figures coming out, to now an even-money bet.

    But when you look at the cost of living figures out this week it is clear that households are already having to reduce their spending on non-discretionary items.

    Out of the 14 biggest contributors to inflation, 10 were non-discretionary items.

    At this point we should note the comments of the secretary of the Treasury, Steven Kennedy, last week in Senate estimates. He was asked about the pathway to a “soft landing” – ie where inflation falls without us going into a recession.

    He noted that chances of a soft landing were made harder by recent rises in oil prices because “on the one hand, it will increase headline inflation by raising petrol prices. On the other hand, it may well reduce growth and see other prices fall because people have less to spend. At least in the short term, expenditure on petrol is not very discretionary.”

    When the prices of things you can’t avoid paying for rise faster than others, then that obviously reduces your ability to spend elsewhere. In this way petrol, electricity and rental price rises have the same impact as do interest rate rises.

    The most recent figures of the volume of retail spending will come out tomorrow, but we know that the volume has been falling, and is now back to pre-pandemic trend levels:

    This of course is what you would expect – when the cost of non-retail items such as petrol, mortgages, rents, electricity, property rates, medical services and insurance are rising, you are going to buy less in the shops.

    Since March last year the cost of mortgages has gone up 114%. Does the Reserve Bank think households haven’t really noticed that?

    Even you if discount the record low rates during the pandemic, the cost of mortgages is now about 70% higher than it was at the end of 2019. Since then, wages have risen only about 10.5%.

    Another rate rise is not going to do anything other than add to the cost of necessities. It would not so much reduce inflation as increase the cost of living and hit households whose wages and incomes continue to be worth less than they were a year ago.


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