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Reforms would ‘kill’ productivity: Big business slams better wages push

Big business has fired a shot across the bows of the Labor government over its plans to improve conditions for low-paid workers and stop big companies from undercutting wages.

Two months after the mining industry launched an advertising campaign against the Same Jobs, Same Pay proposal, the head of Australia’s biggest industry lobby group accused the government of intending to “kill” productivity.

Wednesday’s Press Club address from lobbyist Innes Willox of the Ai Group, an employer group, made the contentious claims that wages have not been unfairly depressed and that there has been no boom in corporate profits.

The speech also attacked the government’s broader changes to rebalance workplace laws and improve conditions, which he said were “unjustified” and would harm the economy.

“Much of what is on the table is actually anti-productivity,” Mr Willox said.

Long decline

Productivity, or the amount produced for every hour worked, has steadily declined for decades from a peak during the computer revolution of the 1980s.

Recently it has fallen to its lowest point in more than half a century, a trend that Treasurer Jim Chalmers says has to be turned around with the “massive opportunity” presented by new technology.

Innes Willox at the National Press Club on Wednesday. Photo: AAP

But Mr Willox argues that the government’s plan to stop companies from hiring temporary staff through labour-hire companies and paying them less than its permanent workforce will make the problem of productivity worse.

“The policy is an unjustified attack on the labour-hire sector, and it will hurt the many businesses and workers that rely on it,” he said.

He made a similar prediction about the effects of recently enacted changes to workplace laws to allow workers across industries to strike pay deals.

These changes would, Mr Willox said, hurt the economy by allowing workers to be paid more even though they weren’t working more efficiently.

“Driving wages up with no productivity trade-offs will only increase the pain,” he said.

Mr Willox also warned the government against making any more than “light touch” changes to improve conditions for workers in the so-called gig economy, more than half of whom earn less than the minimum wage.

Tilting the table

But a new poll found Australians were not hostile to tilting the economic tables in favour of workers, decades after major industrial relations reforms strengthened the hands of employers.

Research from Essential Media found twice as many voters in marginal seats in the crucial (and historically conservative) states of Queensland and Western Australia said businesses had too much power (59 per cent) compared to unions (30 per cent).

A majority of voters, 56 per cent, across 12 seats backed changing the law to stop companies using outsourcing to depress wages.

Three times as many voters in the seats said unions had “not enough” power (19 per cent) as “too much” (6 per cent), the research commissioned by the ACTU found.

Mr Willox used his speech to attack the idea that business bottom lines were booming after a decade of stagnant wage growth.

“We are not seeing a business profit boom,” he said. “There is broad stability in the share of wages and profits in national incomes once the impact of the surging global commodity prices is removed.”

That line drew a rebuke from ACTU secretary Sally McManus, who asked how Mr Willox delivered it with a “straight face”.

The ACTU says labour-hire companies pay their average worker $4700 a year less compared to those in permanent positions.

More than 260,000 people are employed on labour-hire contracts as their main job, ABS figures show, and nearly 85 per cent of all labour-hire workers have no paid leave entitlements.

But Mr Willox said labour-hire’s share of the overall employment pool had fallen.

A Senate select committee report found that the mining giant BHP used “shelf companies” to hire workers on annual salaries of between $30,000 to $100,000 a year less.

The Same Jobs, Same Pay bill will be introduced to Parliament in the spring.

Topics: ACTU
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