26 March 2019

A Shorten Labor Government will reverse cuts to penalty rates, boost wages for workers and ensure that the minimum wage is a living wage – fixing the law so that the Fair Work Commission has the tools to deliver a living wage for Australia’s low-paid workers.

A fair go for Australia means a fair wage for working people. Labor’s living wage policy will directly benefit around 1.2 million Australians, or one in 10 workers. 
Under the Liberals, the economy isn’t working for everyday Australians. Everything is going up in Australia except people’s wages. 
People are finding it harder to get ahead. Households are saving less and families are forced to dip further into their pockets to pay for the essentials.
And Morrison’s Liberals have made it even harder for families to make ends meet. Morrison’s Liberals voted eight times to support cuts to penalty rates, cutting the take-home pay of hundreds of thousands of Australians. And the Liberals have said that low wages are a “deliberate design feature” of their economic strategy.
Boosting wages is good for workers and good for the economy. Consumer spending makes up 60 per cent of the Australian economy. Stagnant wages have held back spending and put a handbrake on economic growth.
When low-paid workers get a pay rise, they spend it in the local shops and help small businesses. It’s good for everyone.

As well as reversing the cuts to penalty rates to boost people’s pay, Labor will make sure the minimum wage delivers a decent standard of living for families.
Labor wants the Fair Work Commission to have the tools to determine what wage is required to provide a decent standard of living for low-paid workers.
The problem with the current laws is that they require the minimum wage to be no more than a bare safety net – a change introduced by the Howard Government. As a safety net, the minimum wage has left some full time workers living in poverty.
Labor will legislate so that the Commission’s highest priority will be making sure no person working full-time in Australia need live in poverty.
A living wage should make sure people earn enough to make ends meet, and be informed by what it costs to live in Australia today – to pay for housing, for food, for utilities, to pay for a basic phone and data plan.
Labor’s will make sure that over time workers are paid a living wage, taking into account the capacity of businesses to pay, and the potential effect on employment, inflation and the broader economy. 
Labor will amend the Fair Work Act to establish a two-step process to introduce a living wage:

  • The first step will be for the Fair Work Commission to determine what a living wage should be. In doing so, the Commission will consider submissions from community organisations, business representatives and unions. The Commission will also take into account Australia’s social wage (the amount of tax people pay, and any family tax benefits or other transfers they receive). 


  • The second step will be for the Fair Work Commission to consider the time frame over which the increase should be phased in, taking into account the capacity of businesses to pay, and the potential impact on employment, inflation and the broader economy. Again, the Commission will take into account submissions from community organisations, business representatives and unions. It will be the Fair Work Commission’s responsibility to determine a fair and responsible phasing in of a living wage.

If Labor is elected, the first living wage case will take place as part of the next Annual Wage Review after the legislation passes the Parliament, with wage increases to be responsibly phased in from the 1 July after that Review.
The living wage will not automatically flow through to Award wages - it will only apply to those receiving the National Minimum Wage. The Annual Wage Review will still determine award wages.
Record low wages growth has been a hallmark of Morrison’s Liberals. Under the Liberals, real wages have stagnated.  
In the last five years, out-of-pocket costs to see a GP are up 24 per cent, private health insurance premiums are up 30 per cent, electricity prices are up 15 per cent, and long day child care costs are up 24 per cent.
But in the past year, company profits have grown five times faster than wages. Labour productivity has outstripped growth in real wages in the past two decades – meaning Australians are working harder and better, but not being fairly rewarded for their effort.
Making sure the minimum wage is a living wage is just one part of Labor’s wages policy. We are also reversing the cuts to penalty rates, taking steps to close the gender pay gap, making sure labour hire workers doing the same job receive the same pay and cracking down on sham contracting, wage theft and worker exploitation.
Getting wages moving again is vital for our economy, it’s essential for families battling rising living costs and it’s the right thing to do for the working people who help create our national wealth.
Bill Shorten and Labor will deliver a fair go for all Australians, not just the top end of town.