Greedy politicians give themselves a pay rise while cutting penalty rates

From July 1, Prime Minister Scott Morrison will receive a 2% pay rise on top of his already inflated parliamentary salary. Morrison currently earns $538,460 a year and in a few weeks time will earn an additional $10,000 a year. The current base salary for federal MPs and Senators is $207,100.

Also from July 1, hospitality workers are set to lose up to $2000 a year due to further cuts to penalty rates. On average, a hospitality worker earns $20.91 an hour for a weekday shift. Further cuts to penalty rates will mean weekend hospitality workers will be $40 a week worse off. These cuts will impact close to 700,000 workers in the sector.

Meanwhile, New Zealand Prime Minister Jacinda Ardern has turned down a $12,000 pay rise for herself and all other New Zealand politicians. New Zealand politicians were offered a 3% pay rise, which Ardern did not believe was acceptable, and has instead moved, with bipartisan support, to freeze MPs’ salaries for a year.

From July 1, Australians on the minimum wage will receive a 3% raise, down from 3.5% in 2018. As a result, close to 2.2 million workers will earn an extra $21.60 a week, with the minimum wage rising to $740.80 a week, or $19.49 an hour.

The Australian Council of Social Service views the poverty line as less than 50% of the median income. In dollar figures the line is $433 a week for a single adult or $909 a week for a couple with two children. During the Change the Rules campaign, CPSU members who work at Centrelink reported it is increasingly common for those accessing Newstart to be employed on minimum wage and/or in insecure work and struggling to pay the bills.

The Coalition government has proposed a $158 billion income tax cut package, supposedly to increase disposable income and stimulate the economy. On June 11, Reserve Bank Governor Philip Lowe urged crossbench Senators to pass the tax cuts to get more disposable income flowing to stimulate a slowing economy.

However, tax cuts mean less money is available for governments to spend on essential services. As a result, low-income workers, who rely on publicly-funded services, will be paying out of their own pockets.

So, where is the supposed disposable income? Labor is refusing to back the third stage of the Liberal’s 10-year tax cut plan, which would see an $11,000 tax cut for workers earning more than $200,000 a year in 2024.

As a result, the NAB monthly survey showed that the retail sector has taken a hit and is at its lowest levels since March 2001, a time when the global economy was going through a minor recession. This is of particular concern as the retail sector is one of Australia’s largest employers.

The continuing downward pressure on wages, particularly already low wages, will only continue to exacerbate the problem. Meanwhile, coming out of the federal election/Change the Rules campaign, it is clear that the union movement had no strategy prepared if a Labor government were not elected. It has been caught on the backfoot.

If we want improvements in wages and conditions, we need an independent industrial campaign lead by unions. Not only do we need to campaign to increase the minimum wage, we also need to campaign to close the gap between award wages and enterprise agreement wages by raising the wages of workers on their industry award.

Unions cannot afford to leave low-waged and insecure workers behind.

[Sarah Hathway is a member of the Socialist Alliance National Executive and a union organiser.]