The mining tax could have paid for the ASU community sector wage claim

In this week's contribution labour movement activist Sarah Howe considers the claim by the ASU (Australian Services Union) for fair pay in the community services sector.  The sector involves mainly women workers, and the union is arguing underpayment is effectively discrimination.   Many are pointing to the potential cost of implementing equal pay, but Howe argues that if the 'Resource Super Profits Tax' (RSPT) had been implemented in its original form - money would not have been a problem.

By Sarah Howe, March 9th 2011

As the media has widely reported, the Australian Services Union is currently running a test case through Fair Work Australia seeking pay rises of between 14 and 50 per cent for about 200,000 mostly women workers in the social and community services sector.

The union wage claim is well deserved-with the media and submissions to Fair Work Australia pointing out that professional front line workers such as non-profit housing support workers are often receiving as little as $18 for extremely qualified and stressful jobs. The importance of the community sector to the health of Australian society and economy can’t be emphasized enough.

The ASU campaign for equal pay for community sector workers (and the growing significance of the sector to the economy) should be seen in the context of the move by Australian government to adopt the UK Blair government model of implementing more engaged, ‘joined up’ and networked approaches to governance and policy-making in recent years- particularly in relation to social policy. This trend has led to planning and service delivery increasingly being devolved to the so called ‘third sector’ (or the community sector). This sector is made up of organizations that are not-for-profit and non-government in diverse industry sectors and is increasingly doing the work traditionally done by government departments and authorities.

In Victoria, the Bracks Governments core social policy document in 1995- A Fairer Victoria: Creating opportunity and addressing disadvantage - aimed to tackle poverty and disadvantage had a strong emphasis on ‘building stronger communities’(Victorian Government: 2005). The community building strategy in this policy often has given responsibility to the community sector to plan and implement social policy outcomes, for instance with urban renewal programs. This is certainly the case in the Carlton context, where I work overseeing an employment program assisting newly arrived refugees into jobs.

In practice today, the community sector now both plans place based social services as well as delivering services on the ground-sometimes with the help of Federal, State and Local Government grants. However, despite the responsibility given to the community sector, significant investment is now required.

The negative view of the Blair model argues that ‘local self help, volunteering and social entrepreneurship are no alternative to progressive state and national tax, income security, service delivery and labour market policies needed to create the conditions for broad and sustainable reductions in poverty, inequality and social exclusion’(quoted in Wiseman, J: 2006).

‘No amount of local community capacity building can substitute for long term investment in core public infrastructure of schools, hospitals, health centers, housing, transport, parks and meeting places that can provide the real foundations for resilient and healthy communities’ (Wiseman, J: 2006 ).

Social services are in high demand, but often woefully under-funded. In my work, I am currently establishing an occasional childcare service to support housing commission residents look for work in Carlton. Yesterday I inspected a similar service managed by a not for profit agency in Broadmeadows. The Broadmeadows service assists newly arrived migrants study English at a location close to their children.

The Manager of the service told me how difficult it was to run the childcare centre, off a low funding base - including paying the current award wages. As we walked to the childcare centre, she joked that they call it the Hawke building- it was paid for under the 1990’s Federal Government capital grants scheme. This scheme does not exist now. Many parents wish it did, as childcare shortages are legendary, and the Local Government and community sector are struggling to provide these vital social services to families in the community. These services are critical for women seeking to re-enter the workforce.

The Federal Government’s response to this investment shortfall is to continually reiterate its desire to ensure fiscal sustainability and return the budget to surplus. In relation to the ASU wage claim, the initial response by the Federal Government was to say that any additional wage costs would come at the expense of other government funded services (Commonwealth Government in The Australian: 2010).

However, in December 2010, the Federal Government at the instigation of the PM intervened to clarify that Fair Work Australia should not award or discount equal remuneration because of the potential impact on the Commonwealth - however despite this reassurance, not much detail was provided on how the wage claim or ongoing capital investment costs of the sector would be met in the future.

While the Federal Government clarification is a positive development for the wage claim, I agree with Kerryn Williams’s recent article in Green Left Weekly in arguing that mining company BHP Billiton’s $10.5 billion profit for the second half of 2010 ‘highlights the shameless greed of those making a fortune out of Australia’s valuable resources’ and underscores the loss for social policy associated with the enormous reduction in revenue associated with the watered down Minerals Resource Rent Tax (MRRT). Recent Treasury estimates indicate that the MRRT will reduce the original RSPT’s 40% tax to just 30%, and will bring in well under half the revenue (Williams: 2011).

“The original tax was supposed to raise about $99 billion starting from the 2012-13 financial year until 2020-21. But it now looks like this figure will be only $38.5 billion. That’s $60.5 billion that could have been spent on health care, education or the shift to renewable energy” (Williams: 2011).

We could add to Williams list of social policy funding needs- the costs of urgently needed community infrastructure and labor costs (the wages bill from the ASU case estimated conservatively to be worth Victorian tax payers $200 million and at the most $1.7 billion over four years). In the absence of reform of the taxation system, the phased in strategy for labor cost increases will have to suffice.

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References:

The Australian, ‘Government warns on women's pay rises’ November 19th, 2010

The Age, Equal pay case could cost Victoria $1.7bn, February 2, 2011

Wiseman, J. ‘Local Heroes: Learning from Recent Community Strengthening Initiatives in Victoria’, Australian Journal of Public Administration, Vol. 65, No. 2, June 2006, pp. 95-107

Williams, K, Mining profits reveal true greed, Green Left Weekly, March 6th, 2011.

Supported Wage System exploits workers with disabilities

Helen Said, an Australian socialist activist has written to us asking us to help an important "cause [become] better known around the Left."   Specifically she is concerned with "the issue of the 'Supported Wage System' which is embedded into most industrial awards."  As she explains: "The System involves paying a worker with a disability a percentage of the award, depending on how they measure up in a productivity assessment. The worker is then asked to enter into an "agreement" to work for a lesser rate of pay and regularly reassessed. Their pay can be cut at any time through such reassessment."  Helen believes this system is unjust; and the following article explains why... 

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submitted by Helen Said

The Supported Wage System allows employers to legally underpay workers with disabilities, depending on how they measure up in a DEEWR productivity assessment.

The federal government’s Job Access program portrays this ruling as part of a progressive package of egalitarian policies, like funding workplace accessibility improvements. The Job Access website describes The Supported Wage System as “a process that allows employers to pay less than the award wage by matching a person's productivity with a fair wage.”
http://www.jobaccess.gov.au/Services/A-Z_list/pages/Supported_Wage_System.aspx

The Centrelink Website further elaborates: “This system incorporates a process of productivity-based wage assessment. For example, if a person involved in Supported Wage System (SWS) is assessed as having a productivity level of 70 per cent compared to co-workers performing the same duties, the worker and the employer can agree to ongoing employment at a pay rate of 70 per cent of the normal rate.”

The Job Access website hails case studies of two workers with disabilities, who earn 70% and 80% of their respective award’s wages, as SWS “successes”. One of these workers was described by her employer as being “able to perform her duties with limited supervision, is reliable and is considered one of our best back area staff, able to cope with busy workloads and she demonstrates that she enjoys her job.”

Job Access further assures employers that “people with disability can have fewer accidents at work—the workers compensation costs for people with disability can be as low as four per cent of the workers compensation costs of other employees …. people with disability can have lower absenteeism and often take less sick leave than other employees …. employing people with disability can build staff morale, raise management awareness of workplace practices and conditions, and increase customer and staff loyalty.”

Yet these are not the attributes that employers and governments consider in deciding how much to pay employees with disabilities. As described in numerous federal government worksites, including this Fair Work Australia report, the sole criteria in deciding how much a worker with a disability gets paid is productivity as measured by a DEEWR-contracted assessor.
http://www.fwa.gov.au/sites/wagereview2010/research/5_2010_diability_report.htm

According to this report “an employee assessed at 10 per cent capacity would have a minimum wage of 10 per cent of the relevant classification wage specified in the award.” This legalised work-for-pocket-money industrial legislation goes against the grain of the equality and deinstitutionalisation policies which operate in every other sphere of society. People with disabilities are being brought up to participate in all aspects of life as equals. Many marry and have families to support. Our industrial legislation on wage levels hasn't caught up. If anything it is going backwards.

Since its inception in 2005 approximately 5000 DEEWR productivity assessments have been carried out on workers with disabilities annually. The majority of SWS participants are male and aged between 15 and 25, mainly living in Queensland, NSW and Victoria. They typically have “intellectual learning disability,” and work an average of 20 hours per week, mostly as trades assistants or factory hands. Assessments of capacity between 40 per cent and 70 per cent are most common, and the average assessed capacity is 53.3 per cent.

Before undertaking an initial SWS assessment to determine the percentage of the award a worker will earn, the worker may be employed on a trial basis of up to 12 weeks for as little as $71 per week, with a possible extension of a further four weeks. This provision effectively grants employers the right to employ workers with disabilities on a casual basis at third world rates of pay, with no chance of ongoing employment, if these workers are deemed to have failed their “trial”.

Employees with disabilities are regularly reassessed by DEEWR “to ensure the employee’s level of productivity is accurately reflected in their remuneration.” But this has nothing to do with granting workers with disabilities incremental pay increases. In fact some workers with disabilities are having their wages further slashed after reassessment for failing to keep up with their employer’s productivity race. Even underpaid workers at sheltered workshops have had their wages slashed when they were brought under the SWS.

The union movement has largely accepted the SWS in the mistaken belief that it gives job seekers with disabilities a fair go. But the SWS sets up workers with disabilities for life long poverty and stigma, ignores the quality of their work, ignores their attendance and reliability as employees and fails to acknowledge the equal or greater economic burdens faced by workers with disabilities. Workers with disabilities need full protection under equal opportunities provisions, including provisions surrounding rates of pay. Any incentives needed to assist with their employment should not be granted at the expense of their wage levels.