Tag: Fiona Macdonald

  • Closing Loopholes: Important repairs to the industrial relations system, no more, no less

    Originally published in The New Daily on December 17, 2023

    Labour hire workers can no longer be paid less than employees doing the same job in their workplaces as a result of industrial reforms passed by Parliament.

    However, other important reforms to close loopholes in employment laws and stop exploitation of workers and avoidance of standards won’t be voted on in Parliament until next year.

    This leaves gig platform workers and road transport contractors waiting to get much-needed minimum pay and conditions standards.

    On the final sitting day of Parliament for 2023, the government’s amended Closing Loopholes bill was passed.

    With a Senate Inquiry into the bill due to report in February it was a surprise to many that some of the reforms were legislated, especially the so-called same-job, same-pay labour hire reforms that had been strongly contested by employers.

    This reform targets gaps in laws that have allowed some large and profitable corporations, including BHP and Qantas, to use labour hire to engage workers on rates that undercut those agreed in enterprise agreements.

    A Senate Inquiry heard evidence that, as a result of employers using labour hire this way, workers were being paid up to tens of thousands of dollars less than employees doing the same work in the same workplace.

    As with the government’s 2022 Secure Jobs, Better Pay bargaining reforms, opposition by some employers to this latest reform has been intense, involving an expensive and unnecessary scare campaign.

    The mining employers’ advocacy body, the Minerals Council, was reported to be spending up to $24 million to fight the labour hire changes and, on the day of the bill’s passing, issued a statement greatly exaggerating the nature and extent of the reform by declaring it to be a ‘‘dramatic rewriting of workplace law’’.

    To get the IR changes through the Senate the government needed to secure the support of key independents and, as a result of this, some parts of the Closing Loopholes bill were set aside to be considered by Parliament in February.

    The parts of the bill set aside until next year include minimum standards for digital platform and road transport workers and changes that make it easier for casual employees who want to become permanent.

    Getting the platform and road transport industry changes in place will be critical for improving working lives and ensuring fair pay and conditions for tens of thousands of low-paid and vulnerable workers who are currently without most rights to minimum standards at work, due to their classification as contractors.

    The reticence of independent senators Jacqui Lambie and David Pocock to pass the platform and road transport industry reforms is perhaps not surprising, given the strong and powerful lobby groups and companies such as Uber, who insist all platform workers are entrepreneurs and small business people not in need of protections, despite the numbers of young, inexperienced, migrant and vulnerable workers in these arrangements.

    Platforms say the costs to consumers will increase exponentially. Small business groups argue reforms are all too complicated and may have far-reaching unintended consequences.

    Labour law experts disagree. It is to be hoped that the extra time for consideration of the proposed changes gives the independents an opportunity to go with the evidence.

    With the support of the Greens and the independent senators some other important Closing Loopholes reforms were in the legislation passed.

    These include new laws to make wage theft a criminal offence, reforms to better protect some workers’ redundancy entitlements and changes to enhance work health and safety.

    Industrial manslaughter will now be a criminal offence, protections for workers experiencing family and domestic violence will be strengthened, and first responders/emergency workers with PTSD will have improved access to support.

    Making superannuation theft a crime is a welcome outcome of the government’s negotiations with the Greens.

    There can be little doubt of the need to act on intentional non-payment of superannuation, with the Australian Taxation Office recently reporting that Australian workers are owed more than $2 billion in unpaid superannuation.

    Superannuation theft not only affects workers’ retirement incomes but can see death and disability insurances cancelled.

    The government has also agreed to consider an amendment to provide workers with a right to disconnect from work outside work hours.

    Despite the protestations of some employer groups there is not much that can be called radical in the Closing Loopholes reform package.

    For the most part, the reforms passed this year and the ones still on the table are exactly what the government says they are – improvements to plug gaps and close loopholes that have allowed some workers to miss out on basic protections, standards and benefits that most other workers enjoy and most employers are happy to provide.


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  • Submission to the Senate Community Affairs Legislation Committee on the Paid Parental Leave Amendment (More Support for Working Families) Bill 2023

    Submission to the Senate Community Affairs Legislation Committee on the Paid Parental Leave Amendment (More Support for Working Families) Bill 2023

    Paid Parental leave reform needs to go further to meet best practice standards
    by Fiona Macdonald and Alexia Adhikari

    This joint submission by the Centre for Future Work and the Nordic Policy Centre argues for immediate further reform to bring Australia’s Paid Parental Leave (PPL) scheme up to international best practice standards.

    In this submission Fiona Macdonald, Centre for Future Work Policy Director and Alexia Adhikari, Post-Doctoral Research Fellow at the Australia Institute, argue that current reforms don’t go far enough and are being implemented too slowly. A proposed entitlement of 26 weeks PPL to be phased in by July 2026 is far less than the international best practice standard of 52 weeks. The two-week ‘use it or lose it’ component reserved for each parent, and which is vital to encouraging more fathers to take leave to care for babies, is too short. Parental leave pay is too low, contributing to women’s economic disadvantage and inequality.

    The submission recommends that the PPL scheme be improved and extended further, including by:

    • Bringing parental leave pay up to a full replacement wage level or to the average wage, whichever is the lesser amount, and including superannuation payments.
    • Bringing forward the extension of the PPL scheme to 26 weeks from 1 July 2024 instead of July 2026 and further extending the scheme through phasing in an entitlement of 52 weeks.
    • Extending to eight weeks the ‘use it or lose it’ component of PPL.



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  • Mid-Term Review of Albanese Government’s Labour Policy Reforms

    Mid-Term Review of Albanese Government’s Labour Policy Reforms

    Reforms will make a significant difference, but further progress needed

    A review of the Albanese government’s labour and industrial relations reforms at the mid-point of its term in office concludes that the government deserves “positive marks” for several measures taken to strengthen collective bargaining and accelerate wage growth.

    That assessment is contained in an article contained in a new special issue of the Journal of Australian Political Economy (JAPE), evaluating the government’s record on a range of issues halfway through its term. The special issue of JAPE was published on 18 December, and was edited by Prof Emeritus Frank Stilwell at the University of Sydney.

    The article reviewing the government’s labour policies was co-authored by several staff at the Centre for Future Work, including Greg Jericho, Charlie Joyce, Fiona Macdonald, David Peetz, and Jim Stanford. It considers the impacts of several government initiatives, including:

    • Successive rounds of reforms to the Fair Work Act (including last year’s Secure Jobs, Better Pay bill, and this year’s Closing Loopholes legislation).
    • Several reforms to address gender inequality in workplaces.
    • A more ambitious approach to raising the national minimum wage.
    • Longer-run proposals for attaining full employment, described in the government’s recent White Paper on Jobs and Opportunities.

    The authors judge that the government’s labour reforms have achieved an “incremental but significant rebalancing of industrial relations.” They pointed to the acceleration of wage growth in Australia in the last year as evidence that workers have won important bargaining power. Wages are now growing at 4% year-over-year, according to the latest WPI data from the ABS — twice as fast as they did on average over the previous decade, which was marked by the slowest sustained wage growth in the postwar era.

    The authors caution, however, that additional reforms are necessary to reverse the erosion of collective bargaining coverage and union membership, and ensure that workers have the bargaining power to improve wages, job security and working conditions.

    “On the whole, the Albanese government has made cautious but useful progress on industrial relations and labour issues during its first year. However, it must be acknowledged that the overall labour relations regime in Australia remains heavily skewed in favour of employers,” the authors concluded.

    Please see the full article, “Labour Policy,” by Greg Jericho, Charlie Joyce, Fiona Macdonald, David Peetz and Jim Stanford, at the link below. Fiona Macdonald also authored a second article in the special issue, dealing with the government’s reforms to care policies. To see the full collection of articles in the special issue, visit the JAPE website.



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

    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

    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

  • Short Changed

    Short Changed

    Unsatisfactory working hours and unpaid overtime.
    by Fiona Macdonald

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

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

    Reforms Would Improve Stability, Wages for Workers in Insecure Jobs
    by Fiona Macdonald, David Peetz and Jim Stanford

    Experts from the Centre for Future Work recently made a submission to the Senate committee studying the “Closing Loopholes” bill, which would make several reforms to the Fair Work Act.

    The submission was prepared by our Policy Director Dr Fiona Macdonald, Carmichael Distinguished Research Fellow Prof Em David Peetz, and Economist and Director Dr Jim Stanford.

    Their submission emphasises:
    • The importance of limiting insecure employment practices (such as casual employment, labour hire, and platform or ‘gig’ work), and providing full protections to workers in those arrangements.
    • The importance of strong and well-resourced mechanisms to ensure the enforcement of these rules, and timely and effective recompense in cases when they are not.
    • The importance of empowering trade unions and their delegates to play their full potential role in enforcing labour standards and ensuring fair compensation and treatment of workers.



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    Factsheet
    Paying for Collective Bargaining

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  • Going Backwards

    Going Backwards

    How NDIS workforce arrangements are undermining decent work and gender equality
    by Fiona Macdonald

    The disability support workforce is central to the effectiveness and sustainability of the National Disability Insurance Scheme (NDIS).

    Hundreds of thousands of NDIS participants rely on this workforce to provide personal support and care on a daily basis.

    The NDIS workforce is large and growing, currently employing about a quarter of a million workers, mostly women. Pay, working conditions and career opportunities in the disability support workforce are critical to the future of women’s economic equality in Australia.

    It is a decade since the NDIS was first piloted, yet the promise for workers, that the scheme would translate into ‘greater pay, … better working conditions … (and) enough resources to do the job properly’ has not been fulfilled.

    Rather, conditions of work in the NDIS are poor and deteriorating.

    The design of the NDIS, with its market basis and poor and uneven regulatory oversight, has undermined fair pay and working conditions for disability support workers and is threatening workforce stability.

    This briefing paper reviews this evidence and argues for significant reforms to address urgent problems arising from these design flaws and regulatory failures.



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  • New laws for ‘employee-like’ gig workers are good but far from perfect

    New laws for ‘employee-like’ gig workers are good but far from perfect

    by Fiona Macdonald

    The Workplace Relations Minister Tony Burke has described proposed new laws to regulate digital platform work as building a ramp with employees at the top, independent contractors at the bottom, and gig platform workers halfway up.

    The new laws will allow the Fair Work Commission to set minimum standards for ‘employee-like workers’ on digital platforms. They are a key part of reforms in the government’s Closing the Loopholes workplace relations bill introduced into parliament this week, and are part of a commitment made before the 2022 election.

    So, what will being halfway up the ramp mean for ‘employee-like’ platform workers? Under the changes, minimum standards can now be set for platform workers, including rideshare drivers, food delivery workers and care workers. Up until now, as independent contractors, digital platform workers have had very few rights, including no rights to minimum pay rates.

    With the changes, the Fair Work Commission will be able to set minimum standards for workers concerning payment terms, deductions, working time, record-keeping, insurance, consultation, representation, delegates’ rights and cost recovery and other matters.

    Other provisions in the legislation are designed to protect workers from being unfairly deactivated from platforms, which is equivalent to being unfairly dismissed, and allow collective agreements for platform workers where platform operators agree.

    The laws will apply only to ‘employee-like’ platform workers, meaning workers who are low-paid (compared to what they would be paid under an award), have low bargaining power and/or have low control over their work.

    There are some restrictions on the standards the Fair Work Commission can set for platform workers. Minimum standards cannot be set concerning overtime rates or rostering arrangements. Nor can the Commission use its standard-setting powers to turn a platform worker into an employee.

    So, ‘employee-like’ platform workers will not have all the minimum standards and rights that employees have. However, halfway up the ramp, they will be much better placed than they were with the minimal rights of independent contractors.

    Overall, these changes are very positive for platform workers and should prevent exploitation of vulnerable workers. However, the reforms stop short of responding to longstanding calls for platform workers, including rideshare, food delivery and care workers, to be treated as employees, and for platform operators to be treated as employers, an approach that has recently been agreed by the 32 member countries of the European Union.

    The proposed reforms in the Closing Loopholes bill don’t go as far as aiming to ensure that how a person is employed can’t leave them without the rights and standards most comparable workers enjoy at work. It leaves platform workers halfway up the ramp in a new worker category with lesser rights than employees.

    The creation of this new category of ‘employee-like’ worker does open up the possibility that some employers may seek to reform their workforces and business models to engage workers who are in the new cheaper worker category, in place of employees. Internationally, where a third category of worker has been created by governments in order to provide protections for low-paid independent contractors, there has been some substitution of employees for workers with less favourable conditions.

    The Closing the Loopholes approach to platform workers also suggests we need to think harder about how to support better flexibility at work.

    The platform work reforms appear to be built on an assumption it is ok for workers who need or want flexibility to have lesser standards and fewer rights at work because of this. Most platform workers value the flexibility they have in their jobs. But that does not mean they should have to trade off rights and standards. Flexibility is not a benefit that accrues only to workers. Consumers and platform operators want flexible services too.

    Originally published in The New Daily 8 September 2023


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  • The Case for Investing in Public Schools

    The Case for Investing in Public Schools

    The Economic and Social Benefits of Public Schooling in Australia
    by Eliza Littleton, Fiona Macdonald and Jim Stanford

    Education has long been recognised as a vital determinant of both personal life chances and broader economic and social performance.

    Public schools play a critical role in ensuring access to educational opportunity for Australians from all economic and geographical communities.

    Public schools are accessible to everyone. They provide a vital ‘public good’ service in ensuring universal access to the education that is essential for a healthy economy and society.

    However, inadequate funding for public schools – measured by persistent failure to meet minimum resource standards established through the Schooling Resource Standard (SRS) – is preventing students in public schools from fulfilling their potential. Growing evidence (including the latest NAPLAN testing results) attests to declining student completion and achievement in Australia, with major and lasting consequences for students, their families and communities, and the economy.

    In this new report, Centre for Future Work researchers Eliza Littleton, Fiona Macdonald, and Jim Stanford document the large economic and social benefits of stronger funding for public schools. The report measures three broad channels of benefits:

    1. The immediate economic footprint of public schools, including direct and indirect jobs in schools, the education supply chain, and downstream consumer industries.
    2. The labour market and productivity gains resulting from a more educated workforce.
    3. Social and fiscal benefits arising from the fact that school graduates tend to be healthier, require less support from public income programs, and are less likely to be engaged with the criminal justice system.

    Citing international and Australian evidence regarding the scale of these three channels of benefit, the report estimates that funding public schools consistent with the SRS would ultimately generate ongoing economic and fiscal benefits two to four times larger than the incremental cost of additional funding. For governments, the fiscal payback from those benefits (via both enhanced revenues and fiscal savings on health, welfare, and criminal justice expenses) would exceed the upfront investments required in meeting the SRS.

    Please see the full report, The Case for Investing in Public Schools: The Economic and Social Benefits of Public Schooling in Australia, by Eliza Littleton, Fiona Macdonald, and Jim Stanford.



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    Factsheet
    Report Reveals True Potential of Fully Funded Public Schools

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