Penalty rate cuts could threaten workers' wages

Paterson MP Meryl Swanson

Paterson MP Meryl Swanson

On July 1, 2017, penalty rates across several casualised industries such as hospitality, pharmacy, fast food and retail, were cut for the first of many times.

On November 1, 2018, casual workers had more cuts to their wages, leaving them around $77 a week worse off.

On July 1, 2019 - just weeks ago - the next round of penalty rate cuts were introduced, and on July 1 next year it will be the same sad story.

By the time these cuts are fully implemented on July 1 next year, some workers will be up to $26,000 worse off. Let that number sink in for a minute.

When the Fair Work Commission recommended the Parliament cut penalty rates in 2017, they did so under the impression it would create more jobs.

While recognising these cuts would affect low paid and vulnerable workers, the Fair Work Commission stated the decision would "increase employment and have a number of positive effects on business".

Like a lot of my colleagues, I disagreed. Although the national unemployment rate is alarming - and even more so in regional areas like ours in the Hunter - the solution to this crisis should not and cannot be at the expense of our lowest paid workers.

After countless attempts to stop them, the Turnbull-Morrison Government again voted to introduce cuts to penalty rates in full. Two years and three penalty rate cuts later, not one single job has been created, according to the Council of Small Business Australia.

The Morrison Government got it wrong. At last count, there were 12,462 people in my electorate - which includes Kurri Kurri, Maitland and Port Stephens - who have been affected by cuts to their penalty rates. Across the Hunter region, that number rises to a staggering 34,900 people.

As the elected member to represent my community in Parliament, I couldn't sit by on July 1 as thousands of people lost hundreds of dollars of their income.

When we went back to Canberra in the first week of July, I raised a motion for this topic to be discussed in the Parliament. It noted a number of points including:

  • penalty rates are not a luxury, they are a necessity for millions of Australians to cope with the rising cost of living;
  • cuts to penalty rates disproportionally affect women, young people and those without a tertiary education;
  • reinstating penalty rates would allow low income and highly casualised industries to invest more money into the economy;
  • and the Government has failed to protect penalty rates and the millions of Australians who rely on them.

I'm relieved that the motion has been selected for debate for July 22, and I would love to tell your stories. If you have been affected by cuts to your penalty rates, please contact my office.

It's time for the Government to exercise some economic leadership and stand up for low paid, vulnerable workers.