There’s an awful lot of nuance around the Fair Work Commission’s attack on penalty rates. The rationale of the commission, echoing the Productivity Commission, is that Sundays aren’t so different from Saturday anymore, so why have an outdated, special Sunday penalty rate? But it also recognises that low-income earners will be screwed over by its decision and there needs to be sort of “transition”. Then there is the nuance of the government insisting the decision is basically the fault of Bill Shorten because he initiated the penalty rates review when in government, and that the commission is the “independent umpire”. And finally the nuance of Labor going to the trouble of preparing a response to the decision with “real people” affected by the decision, only to screw up the detail and embarrass themselves.
None of the nuance matters politically, and none of it matters economically. Money is fungible, and the rationale about Sundays versus Saturdays is irrelevant. The money a waitress earns on a public holiday or a shop assistant earns on a Sunday doesn’t go into a special pot that dictates its expenditure. It’s income — and the decision, if implemented by employers, means a cut in income, for some of Australia’s lowest paid, all on the promise that somehow there’ll be more jobs and more hours. Basically, they’ll have to work more for the same income, or make do with less.
And because low-income earners spend nearly all their income, that means less spending in the economy, at a time when workers are already “enjoying” the lowest wages growth since records began nearly 20 years ago. And it means less income taxation revenue for the government, which on current data has a wildly optimistic forecast for wages growth of 2.25% this year and 2.5% next year. The Coalition and business have been demanding wage cuts for workers for decades. Well, now they’re going to get them, and they may well discover they are hardly the unadulterated positive they’ve been telling Australians for so long.
And the nuance doesn’t matter politically. Efforts to blame Bill Shorten for the decision — while simultaneously insisting that it’s a decision of the independent umpire — won’t cut it (and in any event, why is the Coalition distancing itself from something it has been calling for for decades?). Labor has been working assiduously to construct a narrative of a millionaire prime minister who wants to give tax cuts to multinationals while going after low- and middle-income earners via welfare cuts. On welfare, it’s a nonsensical narrative — the cuts to family tax benefits are long overdue and the government is redirecting much of the savings to more spending for low- and middle-income parents via childcare subsidies (and who cares if Turnbull is rich? We never heard how Kevin Rudd was out of touch because of his wife’s wealth). But it’s a potent narrative and the Fair Work Commission decision has dramatically reinforced it, playing to voter perceptions this government loves to go after the poorest Australians.
Business leaders and lobbyists on six- or seven-figure incomes — not exactly the most popular figures in the electorate at the moment — lining up to laud the decision will only make things worse. And how many of them would have the guts to tell the waiter serving them their latte or the assistant serving them at the shops to their faces that they believe they’re overpaid?
Nor will the issue be one confined to low-income households. One of the reasons WorkChoices became so hated was because even middle- and high-income families who would never vote Labor had kids, nephews and nieces or relatives who experienced the sharp end of a labour market in which employers had been given licence to attack their workers’ wages and conditions. Ditto here: your daughter who is working at a local club or cafe to get through uni, your nephew who works part time at the local shops after school, will have their own stories of having the wages cut.
No wonder the Coalition is distancing itself from the decision. But it’s going to need a better strategy than trying to blame it all on Bill Shorten. That’s a nuance that will get them nowhere as Shorten continues to frame them as mates of the rich who have it in for ordinary Aussies.