The Guardian 15 June, 2005

Here comes the low pay commission

Bob Briton

The Australian Industrial Relations Commission (AIRC) handed down its minimum wage case determination last week. Aspects of the proceedings and the decision had a familiar ring. However, this most recent case marks the end of the commission’s role in wage fixation and the beginning of the next wave of the Howard government’s industrial relations "reform".

The AIRC will now be sidelined and the job of setting minimum pay rates will be handed to the so-called Fair Pay Commission (originally called, more accurately, the Low Pay Commission). This new body will undertake this task "periodically". It will be stacked with economists more sympathetic to the arguments of the government and the bosses about the ability of the economy to deliver decent increases in minimum wage rates. As commentators have pointed out, judging by past experience and despite the regular boasts of a strong economy, this could well be an extremely rare occurrence.

Last year, bosses argued for no increase in minimum wage rates at all. If the arguments of the federal government had been upheld in the commission over the years, the estimated 1.6 million lowest paid workers would have been $2,600 a year worse off since the election of the Howard government in 1996.

In last week’s decision Australia’s minimum wage earners were awarded a 3.6 per cent increase or $17 a week to bring the full-time minimum federal award wage to $484.40. During the proceedings the ACTU had argued for a $26.60 boost, the state governments supported a $20 hike, the federal government $11 and the bosses’ united front of business groups argued for a $10 increase.

In handing down the AIRC decision Justice Geoffrey Giudice criticised the federal government’s failure to provide figures to back up its case for a miserly $11 a week increase and the "theory and philosophy" that a minimum wage rise would adversely affect employment. The government snubbed the commission by not sending a representative to hear its final decision.

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