It’s a no-brainer. Both economically and politically, only time will tell whether cutting penalty rates will create enough new jobs to offset reductions in the pay packets of thousands of lower-paid workers. So the only real option for the drifting Turnbull government is immediately to implement the Fair Work Commission’s recommended cuts that still leave some penalties as high as 225 per cent of standard hourly rates. There must be no delays, no wimpish Turnbullian ‘best of all worlds’ phasing-in as an attempt to soften the blow – and its political fall-out. Economically, the longer the cuts are in place, the greater their prospect of creating jobs for the jobless. The more they are ‘grandfathered’ so nobody loses, the less their potential economic impact.
Giving the cuts enough time to work is the only way to counter the Labor/union claim that there is no evidence that this will result in more jobs or more hours for existing workers and that ‘It’s just a pay cut for the lowest paid Australians who can’t afford it’. If a couple of years isn’t long enough to bring any decent rise in job creation, then the already drowning Turnbull government will simply have lost its only available lifeline.
Politically, Malcolm Turnbull’s only chance of extricating himself from an inevitable electoral disaster is to create as much distances as possible from the penalty rate cuts and the next election, due in mid 2019. He has no other escape route following his failure to prepare defences for this time bomb that has been years in the making. His excellent exposure of Shorten Labor’s incredible hypocrisy on their own referral to their own Fair Work appointees, whose ‘umpires’ decision’ they swore to uphold as a basic Labor principle, is politically irrelevant. The greater the distance between the cuts and the election, the greater the prospect that the inevitable Labor scare campaign (‘You’re next’) will have either run out of steam or be diminished or even disproved by events. And, while past performance suggests it may be a faint hope, the gap will give the government time to implement a powerfully convincing campaign on the benefits of the changes. The top end of town, for a change, should make a meaningful contribution to a debate that so significantly impacts on its best interests, rather than just modestly applauding – which is more than an equivocating Malcolm Turnbull has done so far. He cannot bring himself to endorse what had been Coalition economic Holy Writ for years until the John Howard 2007 Work Choices calamity made cowards of them all.
In his autobiography, Howard strongly defended his attempt to lower penalty rates in order to provide ‘an opportunity for people not in the workforce to enter employment – albeit at lower rates… that meant the difference between remaining on the dole or getting his or her first job’. Tony Abbott, whose term at the top did not include action on penalty rates, noted recently: ‘The issue is not higher wages versus lower wages; it is high wages versus no wages’. But the unions who control the Labor Party only represent workers who have jobs, not those who need them.
Former PM John Howard is the ideal chairman of the late Paul Ramsay’s $3 billion Foundation for Western Civilisation. Howard is a much-needed defender of the ‘old values’ of democracy, the rule of law and freedom of speech, the significance of which are suffering more from a lack of recognition in our education system than from overt attacks (as in the anti-free speech Section 18C of the Racial Discrimination Act). Tony Abbott’s involvement in the new Foundation is welcome; less so that of Julian Leeser, the Liberal MP whose opposition prevented the recent parliamentary committee from recommending the removal of the absurd ‘offend’ and ‘insult’ from 18C, leaving it unresolved.
Before his election last year as MP for Berowra, Mr Leeser was one of the two members of the NSW Liberal State executive who notoriously gave their proxies to enable two faction-leader lobbyists, Messrs Photios and Campbell who are prevented by the Lobbyists Code from acting as members of political parties’ executives, to take crucial roles in selecting NSW Liberal Senate candidates. On these counts, he is clearly the Leeser of two evils.
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