No changes planned to minimum wage and awards system says Govt

Posted on 24 Feb 2015 by Tim Brown

The government is not intending to alter penalty rates or the minimum wage according to Employment Minister Eric Abetz.

Senator the Hon. Eric Abetz
Senator the Hon. Eric Abetz.

In an interview with the The Australian Financial Review, Mr Abetz said the government plans to keep the existing system whereby the Fair Work Commission sets award rates and the minimum wage.

“We have a system that has worked relatively well over many years now, and I don’t want to put the Parliament in the space of the Fair Work Commission,” Abetz said.

A discussion paper titled The first stage of the inquiry investigated the current awards and penalty rates platform and considered if it should be simplified, changed, swapped for time-off-in-lieu or scrapped.

In addition, it asked about how effective the minimum wage is, could it be different in different states, and could it be replaced with changes to the tax system.

However, Abetz said he was surprised when the Productivity Commission said the review would look at the minimum wage and penalty rates.

“Ultimately, we have said that these decisions will be up to the Fair Work Commission to determine as to what a minimum wage ought be, as to what penalty rates ought be, as to what awards [ought to be],” Abetz told the AFR.

“They are all matters for the Fair Work Commission. We were looking more at the architecture of the Fair Work regime, as to whether it was working.”

Abetz’s comments have disappointed business groups which have been increasing pressure to change the system.

Australian Chamber of Commerce and Industry chief executive Kate Carnell told the Sydney Morning Herald that the group, which represents 300,000 businesses, was disappointed as “we hoped the government would do what they said they were going to do”.

“Obviously we are disappointed by the minister’s comments prior to the Productivity Commission report coming down. It seems to be politically inspired and it seems they don’t want to have that debate with the union movement,” she said.

“They have said they would have the Productivity Commission report and that … they would use the outcomes to take a comprehensive policy to the next election. It would seem the policy is becoming less comprehensive.”

The announcement comes after a rather forgettable week for Mr Abetz after he was found wanting for words when asked by Senator Penny Wong about what specific changes the Prime Minister meant when he recently said: “I’ve listened I’ve learnt and I’ve changed and the government will change with me.”