The politics of penalty rates is overshadowing the reality and context of the recent decision by Australia's independent industrial relations umpire, the Fair Work Commission, to marginally and gradually reduce Sunday (and public holiday) penalty rates for some workers in retail and hospitality.
Prime Minister Malcolm Turnbull seems to be failing to prosecute what ought to be a compelling case. Opposition Leader Bill Shorten is dominating the politics despite damning flaws in his position.
Mr Turnbull looks a bit inept, and Mr Shorten rather duplicitous.
He has trashed one of the long-standing pillars of Australia's economic and social harmony – an independent industrial arbiter. He declared before the last election he would respect the decision of the umpire on the pending examination of penalty rates. When he did not like the decision, he dishonoured his word, and launched a pretty dishonest campaign to have the community believe Mr Turnbull is responsible for the decision. He clearly is not. The assertion is a flimsy misrepresentation, but is seen by many as unimpeachable politics.
Mr Shorten, seemingly in contrast with being a champion of the worker, led the Australian Workers' Union when it traded away penalty rates. But he decries Mr Turnbull's non-existent assault on penalty rates. He neglects to mention it was Labor's biggest private sector affiliate, the Shop Distributive and Allied Employees (SDA) that traded away on a massive scale their members' penalty rates. Mr Shorten's former government appointed the commission's five members. It's hardly an organisation with a set against workers.
The penalty rates decision was handed down by commission chair Iain Ross, formerly one of the highest ranking officials of the ACTU. Mr Shorten was instrumental in initiating the commission's review of penalty rates. He neglects to mention the decision applies to only four of the 122 awards overseen by the commission or that workers will still receive the bulk of their substantial penalty rates. Further, the commission wants to offset the effect of this by making the change gradual, so that general wage rises kick in along the way. Our progressive welfare system will also help offset the impact on existing workers. Mr Turnbull supports such amelioration. Mr Shorten neglects to mention he does not have the numbers, so can not introduce legislation to emasculate the independent umpire. Were he to win government in two years, it might well be impractical or even impossible to reverse the decision. Were Mr Shorten fair dinkum about protecting workers, wouldn't he he would come up with a policy to police and prevent the widespread underpayment of employees revealed in the past few years by Fairfax Media. Mr Turnbull should, too.
It is understandable people are upset and angry some low-paid workers will ostensibly have their wages cut - the extent of the effect remains to be seen and there are lots of unsubstantiated numbers out there. But the commission's decision was reasonable and moderate, and if the implementation is properly staged, might well not lead to much of a change at all for existing workers.
What it is likely to do is create employment for some of the three-quarters of a million unemployed people. As revealed by Fairfax Media over the last few years, the SDA has already traded away penalty rates for those employed by big retailers, primarily Coles and Woolworths, and franchises including McDonald's. Paying double wages on Sundays mostly affects small businesses, and they are the ones most likely to add hours and service on a Sunday. The commission said in its ruling that it expects the changes to stimulate employment. You might have thought Mr Shorten would be pleased about that.
The commission has recognised the reality that in a 24/7 economy, such huge penalty rates were no longer sustainable. In its judgment, it said another core reason was to remove the deterrence element that was part of the design of weekend penalty rates; part of their original purpose was to actually deter traders from opening on Saturdays and Sundays. Saturdays are our now biggest trading day, and more shopping and eating out is done on Sundays than on some weekdays.
Mr Turnbull's greatest vulnerability in all this is not the actual decision, although he was curiously slow to back it and has not been capable to win the politics. It is, rather, that at a time when people are concerned about wage stagnation and now about penalties, and when the budget is under pressure increasing pressure, his flagship policy is a massive tax cut to business. There is a big difference between dodgy changes of position and those in response to genuinely changed circumstances.
Mr Turnbull would be widely supported for adjusting cuts that are thought unlikely to give much economic bang for the political and literal buck. Why not consider redirecting some of the money to education and infrastructure, which would give a better economic and social return?
Meanwhile, there's a prospect Mr Shorten's strategy will be undermined as knowledge of the context spreads. People don't like wage cuts, particularly for those on modest wages. They're also generally not too keen on hypocrites.
Michael Short is The Age's chief editorial writer. @shortmsgs
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