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  • “It’s a scare campaign”: award wage rise won’t trigger inflation spiral

    “It’s a scare campaign”: award wage rise won’t trigger inflation spiral

    by Greg Jericho

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    With unions calling for a five per cent increase to award wages, business groups are crying wolf over the proposal’s impact on inflation and unemployment, says Greg Jericho.

    The call from the Australian Council of Trade Unions (ACTU) comes after the Fair Work Commission announced a 23 per cent pay increase for aged care workers, a decision Jericho – Chief Economist at the Australia Institute and Centre for Future Work –  said will bring the award up to around $63,000 per year.

    “It’s incredibly vital work, it’s a growing sector and there are massive shortages,” he said on the latest episode of the Dollars & Sense podcast.

    “One of the reasons there are these shortages is that [workers] are paid bugger all.”

    “And while I still think they are chronically underpaid, especially for how important the role is…at least there is some good news.”

    Business groups and commentators have argued that the ACTU’s proposal will send inflation and unemployment soaring, but Jericho said those claims don’t stack up.

    “Last year, when we had the award go up by 5.75 per cent and the minimum wage go up by 8.6 per cent – again we’re told this is the end of times.

    “The most recent unemployment figures, as we saw last week? They fell!”

    Far from being a sign of runaway wage growth, Jericho’s analysis shows that a five per cent increase would only get real wages back to where they were in 2020.

    The two per cent increase proposed by the Australian Chamber of Commerce and Industry (ACCI) would not only leave workers on an award well short of that mark, but also falling further behind inflation, which was 3.4 per cent in the 12 months to February.

    “Wages should go up more than inflation. Wages should go up more than prices,” said Jericho.

    “If you can’t buy more with your wage than you did a year ago then your living standards haven’t gone up.”

    While increasing wages can theoretically lead to greater demand and rising inflation, the reality is that, for decades, wage increases in Australia haven’t been anywhere near enough to set off inflation, he said.

    Australia Institute research found that, between 2019 and 2022, corporate profits contributed far more than wage rises to the rapid rise in inflation.

    “I can recall then-Senator Eric Abetz…during the Rudd-Gillard years saying we were about to have a wages breakout and then we went on a decade-long run of ever lower wages.

    “It’s a scare campaign.”

    Dollars & Sense is available on Apple Podcasts, Google Podcasts, Spotify or wherever you get your podcasts.


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  • Fixing the work and care crisis means tackling insecure and unpredictable work

    Fixing the work and care crisis means tackling insecure and unpredictable work

    by Fiona Macdonald in The New Daily

    Fiona Macdonald

    Acting Director, Centre for Future Work

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    Originally published in The New Daily on March 8, 2024

    The Fair Work Commission is examining how to reduce insecurity and unpredictability in part-time and casual work to help employees better balance work and care.

    The Commission is reviewing modern awards that set out terms and conditions of employment for many working Australians to consider how workplace relations settings in awards impact on work and care. This follows a 2023 finding by the Senate Select Committee Inquiry into Work and Care last year that there is a “work and care crisis”.

    The Select Committee’s final report noted “too many Australians are working in conditions that lack predictable hours and thus pay”, making it difficult to manage their care responsibilities with paid work.

    Insufficient income to meet family needs, inability to plan, inability to access suitable care, high stress levels and lack of time for life are some of the negative impacts of insecure and unpredictable part-time and casual work for workers with caring responsibilities.

    Women are overrepresented in part-time and casual jobs, as they continue to provide most unpaid care for children, elderly parents, and sick or disabled family members. Among women, casual employment is most common among 15 to 34 year-olds, while for men it is highest among those aged 65 years and older. Women’s casual employment is linked to child-rearing.

    Pay rates in casual jobs are often lower than for employees in equivalent permanent part-time and full-time jobs, despite casual loadings. Underemployment is also high and unpredictable working hours are common among casual and part-time employees, including in services sectors such as retail and care. In both sectors, insecure casual jobs provide workers with very little control over their work hours. Lack of control over hours is often a feature of permanent part-time jobs as well as casual jobs

    In a job with unpredictable hours it can be extremely difficult to organise and manage the costs of care. For example, for parents, uncertainty of working hours and income can make access to reliable and affordable childcare impossible. Unpredictable short-hours rosters can make it barely worth working at all as income may not cover the costs of formal childcare.

    Good quality, secure part-time jobs have long been regarded as essential for greater gender equality in employment, including as part-time jobs can support better sharing of care among men and women. However, the expansion of part-time work in the Australian economy since the 1980s has been an expansion of casual and part-time jobs that are highly insecure, often low-paid and with poorer conditions, protections and entitlements than most full-time jobs.

    It is possible to make casual and part-time jobs more secure and predictable. The Fair Work Commission’s analysis of industrial awards shows that there are many provisions in awards applying to part-time and casual employment that contribute to insecurity and lack of predictability. Award provisions include, for example, short minimum payments periods, broken shifts, poor guarantees around minimum and regular hours of work, little or no payment for travel time between different work locations, little or no notice of roster changes and poor compensation for being on-call.

    Secure work and a living wage are fundamental to good work and care arrangements. Secure work doesn’t just mean ongoing work or protection from unfair dismissal. Secure work entails adequate and predictable work hours, reasonable flexibility of working time, compensation for unsocial hours, safety at work and access to union representation.

    Worker-carers should also have rights to carer’s leave and personal leave, regardless of their employment arrangements. Systems of portable leave entitlements could help all workers manage care and work at all stages of their working lives. These and other leave entitlements would have the benefit of supporting a better sharing of care.

    The Fair Work Commission’s will complete its review in the middle of 2024. It is to be hoped that this leads to improved working conditions for worker carers, enabling men and women to care and work without paying the price through job insecurity.


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  • Aged care wage rise decision crucial for elderly Australians

    Aged care wage rise decision crucial for elderly Australians

    by Fiona Macdonald

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    The Australia Institute says wage rises for aged care workers will improve the lives of elderly Australians after a crucial Fair Work Commission decision.

    The Commission today announced rises between 2 and 13.5 per cent for aged care workers from July 2024.

    “Today’s decision is crucial to supporting safe and quality care for elderly Australians, and the sustainability of the aged care workforce,” said Dr Fiona Macdonald, Policy Director at the Australia Institute’s Centre for Future Work.

    “For too long, aged care work has been undervalued and low paid. The Fair Work Commission’s decision to award additional pay rises, on top of an interim 15 per cent wage rise, is vital to fixing this.

    “The introduction of a new classification structure will also provide the basis for the ongoing recognition and valuation of aged care work.

    “It’s essential the federal government commits to fully funding the additional increases of up to 13.5 per cent from the start of the next financial year.”

    “The exclusion of indirect care workers from today’s decision is a lost opportunity to support the lowest paid workers.”


  • Submission to the Fair Work Commission Modern Award Review 2023-2024, Work and Care

    Gender at Work, Insecure & Precarious Work, Labour Standards & Workers’ Rights, Wages & Entitlements

    Submission to the Fair Work Commission Modern Award Review 2023-2024, Work and Care

    by Fiona Macdonald

    Author

    Fiona Macdonald

    Acting Director, Centre for Future Work

    The Fair Work Commission’s Review of Modern Awards 2023-24 is considering the impact of workplace relations settings on work and care. This submission argues for good quality, secure part-time jobs to achieve more gender-equitable sharing of care and to support women’s full economic participation.



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  • On International Women’s Day: How the Fair Work Commission Can Really Take On the Gender Pay Gap

    On International Women’s Day: How the Fair Work Commission Can Really Take On the Gender Pay Gap

    by Lisa Heap in The Conversation

    Lisa Heap

    Senior Researcher

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    Originally published in The Conversation on March 8, 2024

    On occasion of International Women’s Day, the Centre for Future Work’s Senior Researcher Lisa Heap reviews the opportunities to use recent industrial relations reforms to more ambitiously address Australia’s gender pay gap.

    This International Women’s Day, it is time to call on Australia’s workplace umpire, the Fair Work Commission, to finally close the gender pay gap.

    Half a century after the commission’s predecessor granted women “equal pay for equal work” in a landmark case in 1969, the gap remains between 12% and 21%.

    Amendments to the Fair Work Act by the incoming Labor government in 2022 gave it new tools to close the gap by addressing the undervaluation of work in traditionally female-dominated occupations.

    If it uses these tools to their full potential, 2024 will be a landmark year in the genuine achievement of equal pay for equal work.

    What we’ve been doing hasn’t much worked

    Traditionally in Australia, addressing gender-based undervaluation has relied on two approaches.

    The first has been to argue the business case for gender equality – convincing employers they’ll be rewarded for “doing the right thing”.

    The second has been to bring equal pay cases to tribunals.

    Unfortunately, neither approach has been successful. In particular, pushing for equal remuneration through tribunals has been time-consuming and expensive.

    These tribunals, historically working on models of male full-time wage earners, have struggled to understand the undervaluation of work performed predominantly by women.

    The commission’s new tools

    The commission’s act has been rewritten to require it “to promote job security and gender equality.”
    It also has the power to make equal remuneration orders either on its own initiative or on application in order to bring about equal pay for work of equal or comparable value.

    A further new development is the establishment of expert panels to assist in gender-related cases. Advice from gender experts should assist in overcoming historical gender biases in commission decisions.

    Perhaps the most promising tool is the change to the commission’s modern awards objective, which requires it to eliminate gender-based undervaluation of work and provide workplace conditions that facilitate women’s full economic participation each time it reviews an award.

    Among other things, this requirement is likely to result in provisions that ensure part-time work is treated equally to full-time work and ensure a better balance between work and caring responsibilities.

    Amending awards is likely to be particularly important for women given that almost three in five of the workers on awards are women. Men are mainly on negotiated agreements.

    If the commission wanted to, it could hold a wide-ranging inquiry into the many factors that have contributed to gender-based undervaluation of women’s work.

    It could also review entire industries and occupations that are female-dominated, upgrading multiple awards at the same time. This would avoid lengthy and costly reviews of individual awards.

    What’s likely in 2024

    The Fair Work Commission’s resolve to make lasting change will be tested by several matters currently before it.

    The commission is due to issue its final decision in the case lodged by the Australian Nursing and Midwifery Federation, the Health Services Union, and the United Workers Union on the value of the work done by workers in aged care.

    An initial interim decision delivered in 2022 awarded some – but not all – of these workers a 15% increase, finding that work in feminised industries had been historically undervalued and the reason for that undervaluation is likely to be gender-based”.

    Workplace Relations Minister Tony Burke backed the decision, saying it was merely the “first step”.

    Another application, for nurses and midwives outside of aged care, was lodged by the Australian Nursing and Midwifery Federation in February this year.

    The commission has already started the process of grappling with gender-based undervaluation in modern awards, commissioning research that documents the segregation of women and men into different occupations and industries.

    Further research documenting the history of a select group of female-dominated modern awards and identifying the extent to which common elements indicate gender-based undervaluation, is due to be released in April.

    It will feed into the annual wage review due by the middle of the year.

    How to be bold

    Gender-based undervaluation of women’s work won’t be eradicated by incremental adjustments.

    Here are three bold steps the commission could take:

    • grant a minimum interim 12% increase (one estimate of Australia’s national gender pay gap) across the board for female-dominated awards in this year’s annual wage review
    • develop new systems for classifying work and ascribing work value, breaking with the previous standards built around skills and qualifications in male dominated occupations
    • better consider the uneven bargaining power in industries such as nursing where governments fund care work and try to restrain costs.

    The changes to the Fair Work Act that allow multi-employer bargaining are a start, but unlikely alone to correct the undervaluation of women’s work.

    In female-dominated industries where collective bargaining is non-existent or ineffective, the commission should step in and further increase wages.

    The Fair Work Commission has been given the tools. This should be the year it applies them.


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  • Aged care reforms fall short on quality, safety

    Aged care reforms fall short on quality, safety

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    Mandating sector-wide aged care training requirements would make elderly Australians safer while bolstering workforce stability, according to a new analysis by the Australia Institute.

    The Centre for Future Work warns that reforms due to come into effect from July – including screening requirements to exclude unsuitable workers and a mandatory code of conduct – do not go far enough to ensure the quality and safety or recognise workers’ skills.

    Key findings:

    • The report, Professionalising the Aged Care Workforce, calls for the mandated, sector-wide professional registration and minimum aged care worker qualifications that require all workers to have at least a Certificate III
    • Costs would be minimal because two out of three personal care workers already have a Certificate III or higher qualification
    • Mandating minimum training requirements would lead to higher quality and safer care as well as better career paths for workers to help meet the growing and complex needs of an ageing Australia
    • Two of every three personal care workers already hold a Certificate III or higher qualification
    • Minimum aged care worker qualifications to Certificate III level and access to ongoing professional development were key recommendations of the 2021 Aged Care Royal Commission

    “This is about long-term sustainability for the aged care workforce,” said Dr Fiona Macdonald, Policy Director, The Centre for Future Work at the Australia Institute.

    “Setting a minimum education standard for all aged care workers would lead to higher quality care. It would also allow for the recognition of the skills required to care for society’s most vulnerable.

    “Four out of five aged care workers are women and care work has long been undervalued and low paid. Fixing this is vital for people receiving care, workers and our communities.

    “Workers are facing new demands to comply with screening and obligations to meet standards under a new code of conduct. Yet, there is still no formal recognition of workers’ skills or system-wide requirements for accredited training.

    “While the government is moving to screen out unsuitable aged care workers, it is failing to give those working in or considering aged care meaningful professional development or options for career progression.

    “Mandatory and coordinated accreditation would allow workers to have their skills recognised, boost job satisfaction and make the industry more attractive as a long-term career.

    “The Aged Care Royal Commission has been crystal clear about the need for these reforms. It’s beyond time to deliver them.”


    Related research



    Professionalising the Aged Care Workforce



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  • Professionalising the Aged Care Workforce

    Gender at Work, Labour Standards & Workers’ Rights

    Professionalising the Aged Care Workforce

    The case for worker registration and a mandatory qualification
    by Fiona Macdonald

    Author

    Fiona Macdonald

    Acting Director, Centre for Future Work

    Media release



    Aged care reforms fall short on quality, safety

    This paper presents the case for an aged care worker registration and accreditation scheme

    In accordance with the recommendations of the Royal Commission into Aged Care Quality and Safety (Aged Care Royal Commission) the proposed scheme includes a requirement for attainment of a Certificate III qualification and engagement in ongoing training or continuing professional development (CPD).



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  • The gas industry is laughing at us as they make more money but not more tax

    The gas industry is laughing at us as they make more money but not more tax

    by Greg Jericho in The Guardian

    Greg Jericho

    Chief Economist

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    Originally published in The Guardian on February 29, 2024

    Despite soaring production and revenues the gas industry is not paying more tax

    Australia produces more than six times the amount of gas needed to supply our manufacturing industry, power stations and homes. But more than 80% either heads overseas as LNG exports or is used to convert natural gas into LNG:

    We export much more gas than we used to. In the 2000s we exported around 14m tonnes of LNG a year. Now, due to the opening of the Gladstone LNG terminal, we send 83mt overseas – the second most of any nation.

    But more production and more revenue has not led to more tax, even though the petroleum resources rent tax (PRRT) is in place to supposedly raise revenue from windfall profits such as those generated by the gas industry after the Russian invasion of Ukraine.

    When Australia exported 15.4mt of LNG in 2008-09, the government raised $2.2bn in PRRT. In 2022-23, exports had increased 437% to 83mt but PRRT revenue was up just 7% to $2.4bn.

    Did gas suddenly become unprofitable?

    No, the problem is that the PRRT is open to manipulation that enables companies to use costs to reduce their PRRT liability such that it appears they are never making “super profits”.

    In last year’s budget, the government finally proposed limiting the deductions to the PRRT in any year to 90% of LNG project revenues. Alas that proposal also had a punchline. The government announced the changes would raise an extra $2.4bn in PRRT over the next four years. That was roughly a 30% increase in tax.

    Thirty per cent!

    You would think the gas industry would launch the mother of all campaigns against it. But no. They loved it.

    The day it was announced the gas industry peak body recommended bipartisan support as the changes “would see more revenue collected earlier”. The key word was “earlier”. It won’t raise more tax; it just moves some tax from later to earlier.

    But it won’t even do that.

    In December’s midyear economic and fiscal outlook, the government announced it was revising down its estimate of how much PRRT would be raised over the next four years.

    How much did it reduce its estimate by?

    You guessed it: $2.4bn.

    We need to change the way the PRRT operates, we need to tax our gas more and we need to do it now.


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    Australia’s Gas Use On The Slide

    by Ketan Joshi

    The Federal Government has released a new report that includes projections of how much gas Australia is set to use over the coming decades. There is no ambiguity in its message: Australia reached peak gas years ago, and it’s all downhill from here:

    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

  • More loopholes to close on insecure work … and a new right to disconnect from work

    More loopholes to close on insecure work … and a new right to disconnect from work

    by Fiona Macdonald

    Fiona Macdonald

    Acting Director, Centre for Future Work

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    Late yesterday the final part 2 of the government’s Closing Loopholes industrial relations bill was passed by the Senate.

    This means Australia’s employment laws will be further amended to tackle the problems of insecurity and low pay, with the changes targeting casual employment and gig platform work arrangements. The package also includes a new right for employees to disconnect from work outside their paid work time.

    A new definition of casual employment will be included in the Fair Work Act, making it harder for employers to classify their employees as casual when, in reality, the employees are required to work regular hours for a continuing and indefinite period. The legislation also establishes a new pathway for casual employees to seek permanent status.

    The casual employment changes should go some way to stopping and reversing the growth of so-called ‘permanent casual’ arrangements, which have become widespread. Workers in these arrangements are actually in permanent jobs while they are given casual employment status.

    Casual employment means lower pay, little or no job security and no right to paid leave. Lack of employment security in casual employment creates all sorts of other insecurities for workers, such as limiting access to finance, secure housing and childcare. According to government estimates, there are over 850,000 casual employees who could be eligible to seek permanency under the legislation.

    Gig worker or ‘employee-like’ reforms in the Closing Loopholes package aim to address low pay and poor working conditions experienced by workers on digital platforms who are engaged as independent contractors, are low-paid and/or have very limited bargaining power, such as delivery riders and rideshare drivers. The Fair Work Commission will now be able to make orders for minimum standards for these digital platform workers.

    This ‘employee-like’ reforms extend the scope of Australia’s Fair Work Act to provide protections and rights to vulnerable workers, who are not employees. This should prove to be an effective response to the challenges facing vulnerable ‘gig workers as argued by the Centre for Future Work’s David Peetz has argued in a recent Centre for Future Work report on self-employment.

    Closing Loopholes also includes a ‘right to disconnect’ from work, an initiative of the Greens, included to get the minor party’s support for the bill. In future, employees will have a right to refuse to respond to contact from their employers outside their scheduled hours if the contact is unreasonable.

    Go Home on Time Day research conducted in 2022 by the Centre for Future Work found that 8 out of every 10 workers supported a right to disconnect. This level of support is not surprising, given the amount of unpaid overtime workers are doing. In 2023, the Centre for Future Work reported employees are, on average, working 5.8 hours a week — total of 280 hours, or 7 weeks, a year of unpaid overtime per employee.

    The new right to disconnect is a practical solution for many employees that should also assist to shift cultures in workplaces where reliance on unpaid overtime has become the norm.

    Some employer groups are arguing the Closing Loopholes legislation ‘goes too far’. To the contrary, if there is a weakness in the legislation, it is that it does not always account for power imbalances in the relationship between employees and employers. And this may limit the effectiveness of the some of the new provisions.

    As a result of amendments put forward by independent David Pocock and the two Jacqui Lambie Network senators in response to employers’ concerns, a number of the bill’s provisions will be weaker in the final legislation than they were in the government’s original bill.

    The amended bill passed by the Senate yesterday provides greater scope for employers to refuse casual employees’ requests for permanent status. The proposed prohibition on employers unreasonably contacting employees out of work hours has been removed. In the amended bill the prohibition is now on employers punishing employees who refuse to monitor and respond to unreasonable contact.

    The Closing Loopholes part 2 reforms are welcome changes that will limit some of the damage and disadvantage caused by insecure work and the encroachment of (unpaid) work into life outside work.


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  • We Cannot Truly Value ‘Care’ Until Workers Using Digital Labour Platforms Get Fair Pay and Conditions

    We Cannot Truly Value ‘Care’ Until Workers Using Digital Labour Platforms Get Fair Pay and Conditions

    by Fiona Macdonald in Women’s Agenda

    Fiona Macdonald

    Acting Director, Centre for Future Work

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    Originally published in Women’s Agenda on January 23, 2024

    Unless minimum employment standards for care and support workers using digital labour platforms are guaranteed, decades of slow progress towards proper recognition of care work and equal pay for women could be undone.

    Australia risks returning to the days when the value of a female care worker’s effort and their working conditions were largely determined in private, informal relationships out of sight and out of the scope of regulation that protects most other workers.

    For most of the 20th Century, women workers providing care and assistance to people in private residences were explicitly excluded from the industrial relations system that ensured rights and standards, including minimum wages and employment conditions, for 90 per cent of Australian workers.

    Homecare and other social and community services workers were only recognised as workers at the end of the century, after long and enormously difficult struggles by women and their unions.

    Finally, in the 1990s, for the first time, care and support workers gained regulated minimum standards of pay and conditions. Previously, as unregulated workers, they had extremely low pay rates and some of the worst working conditions in Australia.

    Fast forward thirty years to 2024. The care and support workforce is still highly feminised. It is large and it is growing 3 times faster than other sectors in the Australian economy. Most care and support jobs are still relatively low-paid and insecure.

    Today, however, the need for fair pay, better quality jobs, and career paths for care and support workers has the attention of government and other policy makers. In the wake of the pandemic there is greater appreciation of how the quality of these jobs impacts on the quality of care and support for the aged and people with disability.

    And it is very clear that, if we are to successfully tackle Australia’s gender pay gap and women’s economic inequality, we must ensure better pay and career pathways for care and support workers.

    But now, digital or ‘gig’ labour platforms are undermining the slow progress that has been made towards proper recognition and valuing of care work. This is because most platforms, through which aged care and disability support workers connect with people requiring care and support, insist that workers are independent contractors.

    Platforms compete in the NDIS and aged care markets by using independent contractors to provide cheaper services, while other service providers directly employ workers. Platforms profit from avoiding the costs of employment, including superannuation, training and supervision. Platform workers have no minimum employment standards.

    Digital platform care and support workers have a lot in common with previous care and domestic workers who, for most of the 20th Century, were invisible and isolated, and struggled to have their labour recognised as work.

    Platform workers are without any rights to minimum rates of pay, working time standards, superannuation or other benefits and protections they would have as employees. They mostly perform their labour without peer support, organisational supervision and training, and they are cut off from opportunities for development and promotion.

    Opponents of employment standards for platform care and support workers don’t see it like this. They argue standards are not needed as workers are “entrepreneurs” who set their own rates, earn more than employees, enjoy the flexibility of working when and where they want, and are doing this work as a “side hustle” on top of more substantial jobs.

    None of this is true of the majority of care and support workers on platforms. Most (70 per cent) believe they are employees of the platform, even though they’re not. Even the platforms’ own data shows that workers from groups likely to be vulnerable to exploitation – migrants and younger workers – are over-represented on platforms. Many workers are paid below the relevant award minimum pay rate.

    It makes little sense to refer to jobs as side hustles when 4 out of 5 home and community-based care and support jobs (on and off platforms) are part-time, often short-hours jobs.

    Just because jobs are part-time, or a worker holds multiple jobs, doesn’t mean fair pay and working conditions don’t matter.

    For decades, women had to put up with undervalued work while employers, economists and public policy makers argued women worked in care jobs for love rather than money, and their earnings were not essential income. Present-day arguments opposing minimum standards are a little different, however, they would achieve the same end, perpetuating undervaluation and gender inequality.


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