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Category: Media Release

  • New Research: Commonwealth Can Afford $10b for Aged Care Recommendations

    New Research: Commonwealth Can Afford $10b for Aged Care Recommendations

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    Implementing the recommendations of the Royal Commission into Aged Care Quality and Safety will require additional Commonwealth funding of at least $10 billion per year, and there are several revenue tools which the government could use to raise those funds, according to a new report on funding high-quality aged care released by the Australia Institute’s Centre for Future Work.

    Key Findings:

    • While the Royal Commission’s 148 recommendations were not explicitly costed, the Centre for Future Work report shows that $10 billion per year (approximately 0.5% of Australia’s GDP) would be the minimum required to move forward with the urgent reforms in regulation, employment practices, and quality benchmarks advised by the Commission.
    • Australia’s public spending on aged care is much lower than other industrial countries with better records of aged care service. It also notes that Australia’s overall tax collections are also much smaller (by about 5% of GDP) than the OECD average, and have declined relative to Australia’s GDP in recent years.
    • The report recommends that initial improvements in aged care funding should proceed immediately. With the Budget projected to incur major deficits for many years (due to the COVVID-19 pandemic and recession), it is neither necessary nor appropriate to fully ‘fund’ incremental aged care spending in the initial and most urgent years of reform.
    • However, as economic and fiscal conditions stabilise, additional revenue sources will be important in underpinning high-quality aged care. The report highlights five specific options for raising additional revenue – two of which were proposed by the respective Royal Commissioners:
      • A 1 percentage-point Medicare-style flat-rate levy (proposed by Royal Commissioner Briggs)
      • A set of modest adjustments to personal income tax rates, preserving the existing progressivity of the system (similar to the proposal of Commissioner Pagone)
      • Cancelling the legislated Stage Three income tax cuts scheduled to begin in 2024 (which deliver most savings to the highest-income households)
      • Reforms in the treatment of capital gains and dividend income in the personal income tax system
      • Reforms to company taxes to eliminate loopholes and raise additional revenues

    “Australia is one of the richest countries in the world. There should be no argument over whether we can afford to provide top-quality, respectful care to the elders who helped build our economy and our society,” said Dr Jim Stanford, Director of the Australia Institute’s Centre for Future Work, and co-author of the report.

    “The government has access to a whole suite of revenue options to support the ambitious and quick implementation of the Royal Commission’s recommendations. That effort must start with the 2021-22 Commonwealth budget.

    “There is no immutable economic or fiscal constraint holding back the government from doing right by Australia’s elders. The only question is whether this government places enough priority on caring for seniors with the quality and dignity they deserve,” Dr Stanford said.

    ANMF members have been calling out the failures in aged care for many years and urging governments to make the changes needed to ensure dignified care for older Australians. Governments have ignored these calls for as many years. This cannot continue. The findings of the Royal Commission into Aged Care Safety and Quality have made this abundantly clear,” said Annie Butler, ANMF Federal Secretary.

    “This research demonstrates both the need for investment in the aged care sector and how it can be achieved leaving the Government with no legitimate excuses for continued inaction.

    “However, there must be appropriate “strings attached” to any increases in funding provided to aged care providers, providers must be made fully and transparently accountable for the use of taxpayers’ money and assure Australians that their money is going directly to quality care for their loved ones.

    “If Australia is to regard itself as a compassionate, decent society the Morrison Government must stop the suffering and neglect of older Australians by acting now,” Ms Butler said.

    “This report explains why aged care workers are left in tears after their shifts,” said Caroyln Smith, United Workers Union Aged Care Director.

    “The $10 billion annual funding shortfall is leading to horrendous human costs in aged care, with older Australians left unsafe and vulnerable, and workers left physically and emotionally exhausted.

    “This report once again underlines that the Federal Government needs to substantially and effectively address the human toll the aged care crisis is taking on older Australians, their families and aged care workers,” Ms Smith said.


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    Funding High-Quality Aged Care Services



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  • Australia’s Electricity Infrastructure Undermined by $1 Billion Per Year Under Investment

    Australia’s Electricity Infrastructure Undermined by $1 Billion Per Year Under Investment

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    The resilience of Australia’s electricity infrastructure is being undermined by a chronic pattern of underinvestment in maintenance and upkeep, the result of rent-seeking by private electricity producers and a deeply flawed regulatory system.

    That is the conclusion of a detailed review of empirical and qualitative data on the transmission and distribution system contained in a new report from the Australia Institute.

    Key findings:

    • The electricity grid is facing increasing challenges: including increased severe weather events, bushfires, and the need to reliably integrate new renewable energy generation into the system. But years of underinvestment in capital and maintenance have left the system vulnerable to disruptions, failures, and disasters.
    • The report shows that maintenance and operating costs across the system should be increased by at least $1 billion per year, to match historical levels of real spending per electricity customer.Real per capita operating and maintenance expenditures have been slashed by 28% (in distribution) and 33% (in transmission) compared to 2006 levels.
    • The electricity industry is allocating just 15% of its revenues to capital spending, despite the needs for new capacity and upgrading – down from 25% in 2007.
    • Within this shrunken envelope of operating and maintenance costs, the industry’s focus has shifted away from hands-on upkeep of the grid in favour of managers, sales staff, financial experts, and other overhead functions. There are now 40% more office managers and professionals working in the industry (mostly in finance and sales) than electricians.
    • With this expansion of unproductive corporate bureaucracies, productivity in electricity has performed worse than any other sector in Australia’s economy: real output per hour worked has fallen one-third since 2007. This trend is worsened by chronic underinvestment in hands-on maintenance and upkeep, causing greater vulnerability to outages, accidents, and shut-downs.
    • A perverse pattern of behaviour has emerged in the regulatory system, whereby transmission and distribution companies submit requests for operating expenses which the AER seemingly rolls back – only to have those artificial budgets underspent by the companies, who are allowed to keep some of the savings. This artificial process has padded already-rich profits of energy companies, while ignoring the real needs of the grid for improved equipment and reliability.
    • The statistical analysis in the report is supplemented by evidence gathered from 25 front-line power industry workers, who attest to their personal experiences with underinvestment, poor maintenance, safety hazards, and environmental damage.
    • The report makes 7 recommendations for regulatory reforms that would allocate more resources to the real work of maintaining and upgrading the grid (so it is better prepared for future challenges like climate change and growing renewable generation), while reducing the waste of unproductive financial and speculative activities.

    “The stresses on Australia’s electricity grid are becoming more severe – including climate change, bushfires, and integrating renewable energy. We should be investing more in the quality and safety of the grid, not less. But the combination of energy company greed and deeply flawed regulatory practices is producing systematic underinvestment in this vital piece of electrical infrastructure,” said Dr. Jim Stanford, director of the Australia Institute’s Centre for Future Work.

    “Australia’s fragmented, irrational electricity system has produced soaring prices for consumers, shaky reliability, but soaring profits. It’s time to rethink the fundamental priorities of the regulatory system – starting with channeling more needed investment into the power grid,” Dr Stanford said.

    “Over the past 15 years, high-vis maintenance and transmission workers have been replaced by telemarketers, spin-doctors and banking spivs. This has done nothing for network reliability, but has left us unprepared for the challenge of extreme weather and the incorporation of renewables to our energy supply,” said Michael Wright, Assistant National Secretary of the Electrical Trades Union.

    “Substantial investment is needed to retool for an unpredictable future. Energy generation and distribution is the backbone of industry and jobs and privatisation has simply cost consumers and jobs. Governments must stop inviting private sector financial parasites to feast on our energy system and instead focus on the mammoth task of preparing for climate change,” Mr Wright said.


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  • Rage & Optimism as an Activist Economist

    Rage & Optimism as an Activist Economist

    by Alison Pennington in Crikey

    Alison Pennington

    Senior Economist

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    Originally published in Crikey on April 23, 2021

    Crikey is reclaiming the “angry woman” trope in a new column about what women achieve through rage, passion and determination. In this inspiring and poetic feature with our Senior Economist Alison Pennington, Alison explains how rage about how the economy works (or doesn’t work) powers her forceful work as an activist economist.

    We are pleased to share the article by Amber Schultz, with kind permission from Crikey media.

    Belittled for being angry, Alison Pennington is breaking the mould of boring economists

    Centre for Future Work senior economist Alison Pennington makes no apologies for harnessed rage.

    By Amber Schultz

    April 23, 2021

    Alison Pennington

    Anger is an emotion we’re rarely told to express. Passionate women and people of colour are often framed as overly outspoken, enraged, shrill or resentful. Their fights are discredited the second they raise their voice.

    But regardless of how it’s framed, anger gets results. When directed in the right way, rage can inspire change. It pulls people out of their homes, it causes them to rally outside Parliament, call out bullshit and fight for what they believe in.

    This week Crikey spoke with Alison Pennington, a senior economist with the Centre for Future Work, about what’s got her riled up this week — and how anger has worked in her favour.

    Crikey: When has rage worked in your favour?

    Alison Pennington: My analysis has force because I feel plenty of rage, and the immediacy of every moment. Being passionate is about giving a shit. “Giving a shit” suggests you have a moral code. I make no apologies for harnessed rage.

    My rage is harnessed as a slow-burning force. I want to dismantle the logic of those creating harm and inequality and establish better systems and processes. That requires equal parts rage and optimism.

    Crikey: Have you ever been called out for being angry?

    I have had years of experience of being belittled or seen as not serious, or as capable, because I give a shit.

    I worked in budget at the Department of Finance. When policies hit my desk for review, I could envision how they impacted working Australia on the ground. I’d suggest additional assessments of clearly damaging, non-transparent government proposals. I was routinely told that caring was getting in the way of efficient rubber-stamping. “Just let it wash over you.” I was also told I was “a bit of a bogan”!

    Crikey: Do you fit the mould of a typical economist?

    Most economists are men in corporate jobs who are actually paid to maintain this air of authority, objectivity and distance from emotion. Bringing your humanity to the table every day is much harder than hiding silos of self-congratulatory authority, which is the way that economics is consistently being taught.

    People don’t want to see impersonal suits wearing economists as authorities and people telling them what their life is like and what it should be like. They want to see someone who talks like them, and thinks like them, or is as angry as them and as concerned as them.

    Crikey: What’s got you riled up this week?

    There was an agricultural worker of 15 years. She provides 14 years of blemish free loyal service as a mushroom picker and then gets injured, and then suddenly, in the six months after that, there’s four disciplinary warnings against her. Finally, the employer finds “the evidence” that she can be sacked because she put her mushroom picking knife on the wrong hook.

    The Morison government has gone about increasing the power of employers in our industrial nations laws to screw over workers in the workplace, and that was just a story that really highlighted the difference between rhetoric and reality.

    Prime Minister Scott Morrison and the government can say that they care about women’s work opportunities and making sure women have opportunities to work and close the gender pay gap and all that but like this is what it looks like on the ground.


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  • Expansion of Employer Power to Use Casual Work Hurts Women Most

    Expansion of Employer Power to Use Casual Work Hurts Women Most

    by Alison Pennington in Michael West Media

    Alison Pennington

    Senior Economist

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    Originally published in Michael West Media on March 24, 2021

    As women lead mobilisations against workplace gendered violence, the federal government passed legislation expanding employer power to use insecure, casual labour in its IR bill – laws that will disproportionately impact the pay and security of women’s jobs.

    In this commentary, Senior Economist Alison Pennington explains how new casuals measures and the government’s wider economic policies – including in industrial relations, childcare, welfare, and fiscal spending – significantly undermine the economic security of women, entrench pay inequality, and ultimately, increase their vulnerability to gendered violence.

    This commentary was originally published in Michael West Media.

    Crocodile tears no mask for Coalition’s economic war on women

    Well may Scott Morrison tear up as he relates how his daughters, wife and widowed mother drive his every decision. The facts are that every move of the Coalition government ensures women are poorer, more insecure at work and more vulnerable to violence on the job. The Industrial Relations bill pushed through last week is a final nail in the coffin for women. Alison Pennington reports.

    After a month of anger from women around the country about sexual harassment and the treatment of women in the workplace, federal parliament passed legislation last week that will strike a massive, lasting blow to women’s job quality and pay, entrenching pay inequality and exacerbating women’s economic insecurity.

    The mainstream media has mainly focused on the fact that most of the Industrial Relations bill didn’t pass. But the cornerstone of the legislation – and the primary reason for its inception, pre-pandemic, by business lobbyists – did.

    A new legal definition of casual work will allow employers to call any job a casual one. Jobs can now look and smell like permanent jobs, except that employers can legally engage you as a casual, stripping away your legal entitlements at will.

    So-called “permanency conversion” rights in the legislation are so weak that employers will easily craft employment arrangements to lock in casual jobs long-term.

    Employers will simply vary rosters

    Employers will vary rosters sufficiently to ensure that employees will never reach the benchmarks of six and 12 months of regular schedules that should lead to permanency. In any case, employers will be allowed to refuse offers on “reasonable grounds”. And small businesses, which employ a huge 44% of all private sector employees, are exempted entirely.

    The federal government’s new casual laws will expand the incidence of casual work. Women will disproportionately suffer in a labour market with diminishing opportunities to obtain secure, decent jobs because women are more likely to be in casual roles (filling 54% of all casual positions). And women’s vulnerability to casualisation is growing. Women accounted for 62% of all new casual jobs created in the period from May to November 2020.

    Casual workers are not compensated

    Despite claims from employers that casual workers are compensated for the loss of entitlements and lack of predictability in rosters and tenure, nothing could be further from the truth.

    Casual workers are, on average, paid far less than employees in permanent roles. Median weekly earnings of full-time casuals were 23% lower ($1080 per week) than those in permanent roles ($1400 per week), and 45% lower for casual part-time workers ($390 per week) compared with permanent part-time workers on $720 per week.

    The expansion of the power of employers to use casual work in a jobs market awash with many hungry mouths desperate for paid work means more women in lower-paying, insecure jobs.

    The government’s decision to subject the unemployed to a below-poverty JobSeeker rate means more women reliant on employers to survive. At every move the Liberal National party government is making Australian women poorer, more insecure and more vulnerable to violence on the job.

    Women return to lower quality jobs

    Treasurer Josh Frydenberg celebrates the recent fall in the unemployment rate to 5.8 per cent, claiming the recovery is well under way. But the detailed job quality data tell a very different story for women.

    Women workers are “snapping back” to a world of paid work on inferior terms compared with men – fewer hours, less pay and less security.

    Casual jobs accounted for 64.3% of the total growth in women’s employment from May to November last year.

    Alarmingly, more than half of all the growth in women’s employment over the six-month period was in both low-hours and insecure work, with 52.4% of total growth in employees in part-time casual jobs.

    Traditional full-time permanent jobs with normal entitlements (such as paid sick leave, holidays and superannuation) represented a dismal 10.4% of female employment growth from May through November.

    It’s a crude fact that as women’s casual jobs were booming, business lobbyists were pushing for passage of the IR Bill on the basis that employers “lacked confidence” to hire casuals due to legal “uncertainty”. Australia was simultaneously experiencing the largest and fastest increase in casual employment in its history.

    More fuel for gender pay gap fire

    The consequences of an employment recovery overwhelmingly concentrated in part-time and casual jobs for women is more fuel for the gender pay gap fire.

    The gender pay gap is most often measured by comparing the earnings of men and women in full-time jobs. But women face persistent barriers to workforce participation – including unaffordable childcare, lack of family-friendly work arrangements, and workplace discrimination. Consequently, almost half (45.1%) of all employed women are in part-time work.

    Measuring the gender pay gap using total average earnings data (including both full-time and part-time workers, and bonuses and overtime as well as ordinary time wages) indicates that the gender pay gap is 31% across all jobs – a more dire, but more accurate, measure of the pay gap.

    Ironically, the gender pay gap narrowed in the early stages of pandemic and recession. From late-2019 to May 2020, the gap between male and female total wage incomes declined from 31.4% to 29.6% – down by 1.8 percentage points.

    But this did not represent “progress” in pay equality. The gap only closed because more than 300,000 women in low-paid casual roles lost their jobs, which increased the average earnings of those women who were able to stay connected to the workforce.

    How good’s “snap back”?

    As the economy recovered from May last year, an influx of women’s lower-paying jobs widened the gender pay gap again, just as quickly. How good’s “snap back”?

    Instead of improving the quantity and quality of jobs for women, governments have actively pursued policies that will exacerbate pay inequality this year and into the future.

    In addition to casual work changes pushed through in the IR bill, two other policies create higher barriers to women’s participation in paid work, and suppress their pay once they get on the job.

    The federal government and all states and territories (bar Tasmania and Victoria) have imposed punitive and counterproductive public sector wage freezes and caps on their workforces. This suppression of public sector pay hurts women most because they account for 61.7% of all public sector jobs.

    The failure of government to provide affordable, quality childcare presents another major barrier to women’s paid work opportunities. After dangling free childcare in front of families early in the pandemic, the federal government cut supports and reintroduced fees after just three months.

    The return of full-fee, high-cost childcare prices women out of paid work. More than half of women with young children outside the workforce list childcare costs as a key factor in their decision not to work. A childcare system that lets a small number of profit-driven providers determine access denies families and their children access to critical developmental education and much-needed community bonds as people emerge from pandemic-era isolation.

    Rebuilding women’s economic security requires a very different approach from the bankrupt austerity agenda of government. Women need more and better quality jobs, free childcare, a superannuation system that provides genuine income security and an employment relations system that works to lift the quality, pay and safety of their jobs, not undermine it.


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    Dutton’s nuclear push will cost renewable jobs

    by Charlie Joyce

    Dutton’s nuclear push will cost renewable jobs As Australia’s federal election campaign has finally begun, opposition leader Peter Dutton’s proposal to spend hundreds of billions in public money to build seven nuclear power plants across the country has been carefully scrutinized. The technological unfeasibility, staggering cost, and scant detail of the Coalition’s nuclear proposal have

    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:

  • Wrecking superannuation, not protecting women, is the government’s priority

    Wrecking superannuation, not protecting women, is the government’s priority

    by Alison Pennington in The New Daily

    Alison Pennington

    Senior Economist

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    Originally published in The New Daily on March 20, 2021

    It doesn’t matter what the crisis, when it comes to the Morrison government the message is clear: you’re on your own.

    Women deserve so much more than what Jane Hume is proposing, writes Alison Pennington. Photo: AAP

    It doesn’t matter what the crisis, when it comes to the Morrison government the message is clear: you’re on your own.

    As women across Australia lead historic mobilisations demanding government action on gendered violence week, the federal government encouraged women facing domestic abuse to raid their own superannuation accounts.

    Calling superannuation withdrawal measures of up to $10,000 “an important last resort lifeline” for women experiencing domestic violence, Minister for Superannuation, Financial Services and the Digital Economy Jane Hume later announced the policy would be reviewed following concerns from frontline workers about victim coercion.

    Minister Hume now proposes to strengthen the “integrity” of the scheme with safeguards protecting the free withdrawal of funds. But additional steps for accessing women’s retirement funds do not change the policy’s message: survivors of abuse must fund their own crisis supports. All the while abusers roam free – an addition of intolerable insult to injury.

    Safeguards may stop abusive partners forcing women to raid their retirement savings, but it’s not stopping the federal government. The early-release scheme is entirely consistent with the government’s clear established priorities: dismantling the superannuation system – rain, hail or shine.

    Women marching for economic security and safety are not just ignored by the government. The Coalition’s anti-superannuation crusade to transform the system into an emergency personal bank account actively exploits women’s heightened COVID-era economic vulnerability.

    Women worse off since COVID

    In the initial COVID shutdowns, women experienced greater losses of jobs and hours. Against this backdrop of women’s desperation, the federal government introduced the superannuation early release scheme. Significantly, this was introduced two weeks before the introduction of the Coronavirus Supplement and the JobKeeper wage subsidy.

    Between April and December 2020, 1.5 million women drew down their super, one-quarter of the entire female workforce. $14.9 billion was stripped from women’s already meagre retirement savings. Some 345,000 women completely emptied their accounts. Many more women aged under 20, and also those aged 36-55 (prime working years pre-retirement), withdrew from their superannuation compared to men.

    In 2018, the Coalition announced domestic violence would be added to the list of early release “compassionate grounds”. Frontline domestic violence services voiced concern back then too. Now, pressured by intensifying calls for a proactive government addressing gendered violence, the Coalition suggests “safeguards”.

    The federal government acknowledged heightened gendered violence risks during COVID. But it has still failed to give sufficient funding to the domestic violence sector, lift critical income supports for vulnerable women fleeing abuse, or introduce paid domestic violence leave into minimum labour laws. In fact, $1 million was cut from anti-domestic violence education programs in schools in the 2020 October Budget.

    Early release scheme exacerbates disadvantage

    Women already face systematic disadvantage in the superannuation system and have much lower retirement incomes: they retire with barely half the retirement savings of men. There urgently needs to be targeted reforms to prevent labour market inequalities that reduce women’s career earnings from being baked into the superannuation system as well.

    Abolishing the $450 per month minimum threshold, closing the ‘motherhood gap’ by making super payable for all paid and unpaid care-related absences, and proceeding with the legislated increase in the superannuation guarantee (to 12 per cent) are all important to boosting women’s economic security and safety.

    In the absence of real action on gendered workplace and domestic violence, the government’s superannuation early release scheme for domestic violence victims only exacerbates women’s economic insecurity.

    Women desperate for incomes to survive are more reliant on abusive partners and low-wage casual jobs, more helpless to the threat of ‘handsy’ bosses and colleagues, and below-poverty welfare payments in the future. This latest policy only increases the risks of gendered violence over women’s lifetimes.

    For women experiencing job loss, financial hardship or domestic violence, the message from the federal government is one we are getting sick of hearing: in a crisis, you’re on your own.

    Australian women deserve so much more.


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  • Casual Job Surge Widens Gender Pay Gap

    Casual Job Surge Widens Gender Pay Gap

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    New research, released for International Women’s Day (8 March 2021), shows Australia’s recovery from the pandemic recession has widened the gender pay gap, as women’s jobs returned on a more part-time and casualised basis than for men.

    The report, by the Centre for Future Work, warns that Australia’s gender pay gap could deteriorate even further in the wake of policies proposed by the Government for 2021: including the further expansion of casual work and reduced pay for part-time workers, tabled in the omnibus industrial relations bill; public sector pay caps for both federal and state employees; and a high-cost, inaccessible childcare system.

    Key findings:

    • Women suffered disproportionate job losses when the COVID pandemic hit, and as the economy recovers are returning to jobs that are relatively more insecure.
      • Employment for women declined almost 8% between February and May 2020—over 2 percentage points worse than for men.
      • Women’s employment is still 0.9% lower than in January last year (around 53,000 less jobs), while male employment went up over that same period (by an additional 7,000 jobs).
      • Job-creation since May (the worst month of the COVID recession) has been heavily concentrated in casual and part-time jobs. From May through November, casual jobs made up over 60% of new jobs –and women filled 62% of those casual roles.
      • The disproportionate concentration of women in newly-created casual and part-time jobs is largely responsible for a significant widening of the gender pay gap after May.
    • Measuring the gender pay gap using total average earnings data (including both full-time and part-time workers, and bonuses and overtime as well as ordinary time wages) indicates that the gender pay gap is 31% across all jobs. That is a more dire, but more accurate, measure of the pay gap than other measures which include only full-time jobs.
    • Three major existing and proposed government policies could further widen pay inequality in 2021:
      • The further expansion of casual work and reduced pay for part-time workers, tabled in the omnibus industrial relations bill.
      • Public sector pay caps for both federal and state employees.
      • A high-cost, inaccessible childcare system.

    “The gendered nature of the pandemic recession on Australia’s labour market has markedly worsened pay inequality,” said Alison Pennington, senior economist at the Centre for Future Work.

    “Women lost jobs at a greater rate than men when the pandemic hit, and as the economy has recovered, are returning to fewer jobs offered on a more casualised basis. The gendered employment recovery is disproportionately leaving women with less hours, security and pay than men—a clear example of why a simple post-COVID “snap back” was never adequate for women.

    “Women have been bearing the brunt of the COVID recession while governments have targeted stimulus spending in bloke-heavy industries, neglecting investment in industries that support women’s employment, including healthcare, education and social services. To stop further deterioration in pay inequality, targeted efforts to lift women’s work and earning opportunities is critical.

    “Focused investment in women’s job creation, free childcare, and wage-boosting industrial relations policies are all within reach of governments at both federal and state levels.”


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    Briefing Paper: Women’s Casual Job Surge Widens Gender Pay Gap



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  • Business Council of Australia Research Confirms Centre for Future Work Research

    Business Council of Australia Research Confirms Centre for Future Work Research

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    The Business Council of Australia (BCA) has today released a report which confirms trends described in earlier research by the Australia Institute’s Centre for Future Work.

    However, the BCA’s expressed concern for ‘the future of bargaining’ contradicts its support for the Government’s omnibus bill which will further undermine genuine bargaining and suppress already record-low wage growth.

    “The Business Council of Australia celebrates the benefits of enterprise agreement (EA) coverage by comparing higher average wage outcomes obtained under EAs with other pay-setting methods. Ironically, this endorsement is offered in their support for the Government’s omnibus IR Bill which will result in an enterprise bargaining system involving less union representation and reduced scrutiny of sub-par EAs by the regulator,” said Alison Pennington, senior economist at the Australia Institute’s Centre for Future Work.

    “However, empirical data proves union representation is essential to achieving higher wage gains in EAs – the very advantage that the Business Council of Australia extolls.

    “By weakening the ‘better off overall test’ (BOOT), watering down scrutiny and approval processes, and introducing 21-day approval deadlines, the government’s IR Bill will accelerate growth in non-union EAs. For the last 10 years, non-union EAs have delivered lower wage increases than union-covered EAs. Alarmingly, the majority of non-union EAs have not specified any wage increases at all.

    “These sub-par EAs are what the business lobby want more of, but they will not ‘save’ enterprise bargaining. More non-union EAs will come at the expense of genuine collective bargaining, and would produce a decline in average wage increases for EA-covered workers.

    “In fact, the BCA’s proposals would take the “bargaining” out of enterprise bargaining, and wage increases out of enterprise agreements.

    “Do not be fooled by business lobbyist ‘complexity’ claims. The collapse of enterprise bargaining in the private sector is due to long-term structural factors including de-unionisation, employer resistance to genuine bargaining, full legal protection for free-riding, and failure of the Fair Work Act to support genuine bargaining in EA formation.

    “The current EA system has produced a long-term decline in independent employee representation, especially in the private sector.

    “Rebuilding collective bargaining and arresting wage stagnation will require a very different direction in reforming Australia’s IR laws, including the phase-out of non-union EAs, genuine review and approval processes, and multi-employer and sectoral bargaining.”

    Key findings from Centre for Future Work research:


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  • Omnibus IR Bill will Further Reduce Wage Growth

    Omnibus IR Bill will Further Reduce Wage Growth

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    New research by the Australia Institute’s Centre for Future Work shows the Federal Government’s omnibus industrial relations bill will lead to a significant increase in employer-designed enterprise agreements (EA) that reduce workers’ pay and conditions, rather than improve them—signalling a return to the WorkChoices pattern of EA-making and putting further downward pressure on Australia’s already record-low wages growth.

    The bill proposes sweeping changes to labour laws which would see an acceleration of EAs written unilaterally by employers, without negotiation with a union. EAs will be exempt from the current Better Off Overall Test, subject to less scrutiny at the Fair Work Commission, and employers will have less stringent tests to ensure their proposed EAs are genuinely approved by their affected workers.

    Key findings:

    • Wage increases under non-union EAs are consistently and significantly lower than in union EAs; on average one-percentage-point lower since 2010.
    • The majority of non-union EAs approved between 2006 and 2019 did not specify any wage increases at all, instead linking wage increases to non-legislated measures like CPI, minimum wage decisions by the Fair Work Commission, or employer discretion.
    • In addition to lower (or no) wage increases, the average duration of a non-union EA is longer than for union EAs, locking in inferior wage outcomes for longer periods of time.
    • The exemption for EAs to meet the Better Off Overall Test (BOOT), which shows whether employees would be better off under a proposed EA than under the relevant Award, is supposed to last for two years. But in reality, the terms of EAs negotiated under the BOOT exemption could stay in effect for many years, unless they are renegotiated or terminated.
    • While the overall share of workers covered by EAs will likely increase if these measures pass, a higher proportion of EAs will consist of sub-standard, lower-wage deals, which will see Australia’s current record-low wage growth get worse, not better.

    “When the COVID-19 pandemic hit, wage growth slowed virtually to zero. The omnibus bill will lock in that wage stagnation, by further weakening the already-constrained ability of workers to negotiate genuine collective agreements,” said Alison Pennington, senior economist at the Australia Institute’s Centre for Future Work.

    “Australia’s experience under WorkChoices, when similar policies were implemented, demonstrates that if the proposed bill is introduced both the number of non-union EAs will increase, and the share of EAs without any specified wage increases will grow.

    “Non-union EAs deliver significantly worse wage outcomes that union-EAs, even with the BOOT in place. Removing the BOOT will open the floodgates for employers to rush the approval of EAs that undercut Award wages, further suppressing wages growth in 2021 and beyond.

    “Any increase in the number of lower-wage, non-union EAs will reduce rather than lift the wages and conditions delivered through EAs overall, leaving Australian workers worse-off.”


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  • Migrant Workers Abandoned in the COVID Recovery

    Migrant Workers Abandoned in the COVID Recovery

    by Alison Pennington

    Alison Pennington

    Senior Economist

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    COVID continues to sweep Europe and the US, while Australia celebrates near-elimination of community transmission. But Australia’s public health success has not come without significant economic and social hardship for large sections of our community – especially migrant workers. Thousands of migrant workers were pulled off the job to stop the spread of COVID-19, and excluded from key government income support programs including JobSeeker and JobKeeper. Temporary migrant workers are still left without access to Medicare.

    In this short, accessible commentary, Senior Economist Alison Pennington outlines how the pandemic, the resulting recession and government COVID-era policies have increased risks to migrant workers’ financial security, and health and safety. Building more secure, inclusive labour markets can reduce risks that future major events don’t hit the most vulnerable hardest.

    This commentary was prepared for presentation to the Migrant Workers Centre Conference, November 2020.

    Migrant Workers & The COVID-19 Recession

    by Alison Pennington, Senior Economist at Centre for Future Work

    COVID infections continue to sweep Europe and the US while Australia celebrates multiple days without any cases of community transmission. But Australia’s public health success has not come without significant economic and social hardship for large sections of our community – especially migrant workers. Thousands of migrant workers were pulled off the job to stop the spread of COVID-19, and excluded from key government income support programs including JobSeeker and JobKeeper. Temporary migrant workers are still left without access to Medicare.

    As the economy slowly recovers from recession, migrant workers will face even greater hardship in accessing decent jobs and incomes. The expiration of temporary work visas without supports to reconnect with new employers, and in jobs that pay enough, will expose migrant workers to more intense exploitation.

    The federal government’s response to the unprecedented COVID-19 economic crisis has included big spending on tax cuts, subsidies and other business concessions as part of its “business-led recovery”. But there are many problems with how the government thinks about the economy, that will mean the economic crisis will be longer and more painful than it needs to be.

    The pandemic has left deep cuts in the economy: two million people (15% of labour force) are either unemployed, working far fewer hours than normal, or have left the labour market all together since the March lockdowns; consumer spending has not fully recovered after lockdown restrictions were lifted and people prefer to save in preparation for harder times. Companies are focused on recovering or maintaining profits, cutting investments in their businesses, and cutting spending on employment and wages. Private investments have been decreasing for years and will not miraculously rebound during a recession. Trusting the private sector to lead our post-COVID economic recovery therefore is like hoping for a miracle.

    Income tax cuts are mainly symbolic and do not have real and lasting impacts on boosting spending in the economy. In fact, normal pay rises are far more effective than tax cuts because the effect of wage growth is permanent and cumulative. The announced tax cuts are also unfairly designed to benefit high-income earners. 88 per cent of the combined permanent benefit of the tax cuts will go to highest-fifth of income earners whereas low- and middle-income earners will get only a one-time rebate of $1,080 at the next tax return.

    Wage growth is expected to stay at 1.25 per cent in 2021 – enough only to match the slow rise in consumer prices. But a higher unemployment rate and continued increase in part-time and casual jobs will cut household incomes even more. If the government adopted measures to strengthen wages including higher minimum wages and stronger collective bargaining rights, our recovery would be on a better track.

    Youth, women, migrant workers and long-term unemployed are in most need of targeted job-creation policies. But the federal government has presented no plan to create jobs for the millions of unemployed, underemployed and disenfranchised who want and need paid work. The JobMaker program provides a subsidy for 12 months to employers creating new jobs for young workers on unemployment payments. It is a short-sighted initiative that will not reach its intended claim of creating 450,000 jobs (Treasury estimate now 45,000). There is no guarantee young workers will maintain employment once the government stops paying for the subsidy.  Without job protections, the program will encourage the “churning” of vulnerable young workers in low-wage, insecure jobs. It could also displace existing workers and discourage the hiring of others. Migrant workers have already experienced mass redundancies when employers chose to engage workers who qualified for the JobKeeper subsidy. Migrant worker displacement may occur under JobMaker.

    Despite Australia’s macroeconomic weakness, the government intends to decrease spending by billions in cuts to the JobKeeper and Coronavirus Supplement payments in March 2021. The impacts on the jobs and incomes of low and middle-income workers will be disastrous. The real way to overcome the recession will be to restore the capacity of people to work, earn and be healthy, engaged members of a more inclusive Australian economy. This can be achieved only when the government commits to a long-term, ambitious vision for economic and social change, backed by substantial and sustained public spending. This vision should create more secure jobs, invest in climate-friendly industries, and strengthen and expand our public services like healthcare, education and skills.

    Rather than wait for private sector investment, the federal and state governments can expand direct public sector employment now. They can also ensure all people residing in Australia are protected from poverty and insecurity now. Urgent measures should be taken immediately to address the pronounced risks to migrant workers’ financial security, and health and safety experienced during this crisis:

    • Expand JobSeeker and the Coronavirus Supplement coverage to excluded migrant workers. Reverse the punitive and economically counterintuitive cuts to the Coronavirus Supplement, and permanently restore the $550 per fortnight rate.
    • Expand JobKeeper coverage to all workers, and end the two-tiered wage subsidy scheme, returning the original $1,500 flat payment rate permanently.
    • Create a paid sick leave scheme available to all workers, regardless of their work status.

    The pandemic has shone a light on the growing scourge of insecure work. Around half of all employment in Australia has one or more dimensions of precarity including casual, temporary, part-time insufficient-hours work, and self-employment. Precarious work contributed to the community spread of disease, such as in the private aged care system where widespread practices of multiple jobholding led to virus transmission between facilities.

    We have worked together to eradicate COVID-19, and we can work together to eradicate insecure work. Working to build more secure labour markets for all is about reducing risks that major events don’t hit the most vulnerable hardest. Job creating investment, quality public education and skills systems, income supports for all, and extending minimum labour standards like Award wages and collective bargaining are critical to an inclusive post-COVID recovery. And by strengthening the collective efforts of workers to take action in their unions, we can put good jobs and incomes in the driving seat of Australia’s economic recovery.


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  • Pandemic Exacerbated Inequality, Insecurity in Australia’s Labour Market

    Pandemic Exacerbated Inequality, Insecurity in Australia’s Labour Market

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    A year-end review of the dramatic changes in Australia’s labour market in 2020 has confirmed that the worst economic impacts of the Covid-19 pandemic were felt by Australians in relatively low-paid, insecure jobs.

    Key Findings:

    • Workers in casual jobs lost employment at a rate 8 times faster than those in permanent positions
    • Part-time workers suffered job losses 3 times worse than full-time workers
    • Young workers, women, and workers who do not work in offices also suffered disproportionate job losses during the initial shutdowns – and continue to experience much worse employment conditions
    • Worse yet, the report shows the rebound in employment that began in May has seen a historic surge in insecure jobs – which account for the vast majority of new jobs created since the economy began re-opening

    “It is painfully ironic that the worst impacts of the pandemic were felt by those who could least afford to lose their work and income,” said Dr Jim Stanford, Director of the Centre for Future Work, and co-author of the report.

    “Both on the way down, and on the way back up, this recession has reinforced the dominance of insecure work in Australia’s labour market.

    “Precarious work strategies explain why the effects of the pandemic were so painfully unequal, and this new surge in insecure work makes Australians even more vulnerable to such shocks in the future.

    “Covid-19 had a terrible impact on both the quantity and quality of work in 2020. Because Australia has been relatively successful in controlling the virus, the labour market could improve significantly in 2021, however, the rapid expansion of insecure work poses a major challenge to the stability and prosperity of Australian households,” Dr Stanford said.

    Other findings of the report include:

    • Since May, over 400,000 casual jobs have been created (2200 per day, on average), accounting for over 60% of all new waged positions since the recovery started. That is the largest surge in casual employment in Australia’s history – contradicting business and government claims that uncertainty about casual employment rules are holding back hiring.
    • Workers over 35 years of age have regained all of the jobs lost in the pandemic, and then some. All remaining job losses are concentrated among workers under 35.
    • Office-based occupations (professionals, clerical workers, and most managers) have also regained pre-pandemic employment levels. But other occupations (especially community and personal services, sales workers, and labourers) continue to suffer major employment losses.
    • New labour laws proposed by the Commonwealth government would accelerate the surge in insecure work: liberalising the use of casual labour by employers, and allowing them to treat permanent part-time workers more like casuals.

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    2020 Year-End Labour Market Review: Insecure Work and the Covid-19 Pandemic



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