Labor’s sledgehammer on the workers
Allegra Spender Member for Wentworth
The Reserve Bank has now hiked rates 13 times in 18 months, which means a family with a typical mortgage is paying $1400 more each month.
This is putting real pressure on household budgets. Families are responding as best they can. Some are cutting back on discretionary spending, some are dipping into savings, and some are finding ways to earn more income by working extra shifts, taking on casual work, or earning a side income through the gig economy.
Whatever the source, this additional income has helped across the economy.
It’s enhanced the resilience of households, protecting the economy from an interest rates-led recession or a collapse in the housing market. It’s encouraged more labour into the market, which helps relieve the shortage which has been a driver of inflation. And it’s helped build skills, experience and financial independence for people long outside the labour market.
This is a modern phenomenon. Families are keeping their heads above water because our economy is more flexible than it was. We have embraced casual jobs, independent contracting, and work-from-home because they are mutually beneficial. Flexibility is particularly important for those with caring commitments.
These arrangements aren’t for everyone – but McKinnon Foundation research shows the majority of people in non-traditional work are satisfied with their arrangements.
Critically, flexible work enable people to enter the labour market. Long-term unemployed, mothers returning to the workforce, young people, and migrants often get their first break with flexible work.
This makes the government’s crackdown on flexible work so problematic. The changes before parliament undermine all forms of flexibility: casual jobs, temp jobs, independent contracting, and the gig economy.
Undermining casual jobs is a particular concern. Contrary to what you sometimes read, rates of casualisation are unchanged in decades. And McKinnon research shows the majority of works want to remain casuals and keep those higher rates of pay. Only a minority want to be permanent.
Small businesses simply won’t know if their casual workers are truly casual – or what their legal obligations are.
This crackdown can stop people being able to mutually agree that a job is casual. Instead, the decision can be made by a third party based on vague criteria such as “mutual understandings of expectations” rather than a contract. Those decisions can be retroactive, meaning small businesses simply won’t know if their casual workers are truly casual – or what their legal obligations are.
It is concerning this agenda is being pursued now, when family budgets have never been tighter. But in the future, it will mostly hurt those trying to break into the workforce.
The e61 Institute has shown how reduced flexibility leads businesses to cut back on employment and invest more in capital – such as self-serve supermarket checkouts – so there will be fewer opportunities for inexperienced workers.
The government has alternatives. It could make part-time work more appealing to employers, such as simplifying awards and making it easier for employers to offer overtime hours.
Both sides of the labour market are still figuring out how to make flexible arrangements work.
There are pockets of the workforce where things aren’t working: McKinnon showed a large number of full-time casual workers aren’t satisfied with the insecurity of their jobs and want to become permanent, full-time employees.
We ought to do more to support workers in that situation and ensure people can find the workplace arrangements that work for them.
Rather than taking a sledgehammer to flexible work arrangements, the government should focus on ensuring people with surging rents and mortgages have plenty of opportunities to earn additional income.
That means protecting flexibility and the workers it supports – not attacking it as a loophole which needs to be closed. Government can’t control the cost of living crisis but can help people get through it.
And they should invest in longer-term reforms to raise wages through productivity growth and increased competition for workers.
Organisations such as e61 and the Productivity Commission routinely publish sensible, effective proposals to make this happen, like action on occupational licensing, non-compete clauses, and simplifying the award and bargaining systems. Though it is disappointing that the treasurer recently removed workplace relations from the Productivity Commission’s remit.
Everyone agrees on the need and benefits of these. Australian workers just need their government to listen and to act. Surely a Labor government can deliver a pro-worker agenda.