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Issue #1541      28 March 2012


Double dipping bosses

Employers never miss an opportunity to restrain or reduce wages. Any excuse will do – regardless of whether the economy is booming (it will cause inflation and cost jobs) or in recession (it will cost jobs). These age-old capitalist myths are trotted out at every opportunity. So it is not surprising that big business has latched onto the government’s plans to raise the compulsory superannuation guarantee levy from nine percent to 12 percent. It will send them broke, they will have to sack workers, move offshore, etc, etc, or so they say. Employer bodies are demanding the government amend the Fair Work Act so that future wage rises up to 2020 are reduced or traded off against the increase in superannuation payments.

Legislation to increase the superannuation levy was passed by Parliament last week. It was part of the new mineral resources rental tax (MRRT) package. Bill Shorten, minister for financial services and superannuation, in his second reading speech on the bill said, “The MRRT makes it possible to increase the superannuation guarantee from nine to 12 percent, boosting super savings of 8.4 million Australian workers by $500 billion by 2035.” This will be done, according to Shorten by using some of the income raised through the MRRT to fund a one percent cut in the corporate tax rate. In turn corporate tax cuts will fund the increase in employer superannuation contributions.

The increase in the levy will be introduced in small incremental steps by 2019-20, hardly placing a strain on corporate profits. The government plans to give small business its one percent tax cut next financial year, with larger businesses a year later. The Greens are strongly and quite correctly opposed to giving big business any corporate tax cuts. The tax cut legislation is slated for the May budget.

The Greens have given plenty of warning that they will only support tax cuts for small business. Gillard is determined that it will be all or nothing with the corporate tax cuts and is pursuing the Coalition for support. After all, the cuts are a continuation of the Howard government’s taxation policy and Opposition leader Tony Abbott supports them in principle as he does the increase in the superannuation levy. Abbott, however, appears just as determined as ever to oppose, for the sake of opposing, everything Labor puts up for adoption.

The original nine percent levy came out of workers’ pockets, as wage increases were traded off. This time employers not only want the compensation from the government through tax cuts but to double dip and take it out of workers’ pockets as well. Incoming general secretary of the Australian Council of Trade Unions Dave Oliver has come out strongly opposing any trade-off in wages.

This was the position of the government until recently. Now Shorten, who is also the minister for workplace relations, is pushing the employer line, demanding unions negotiate with employers “deferred wage increases”. He says “deferred”, but the real intention is that the wage increases workers might have received will be forgone. That is what happened when the nine percent was phased in.

In response to calls from the chief executive of the right-wing Australian Industry Group, Heather Ridout, for amendments to the Fair Work Act, Shorten said, “I’m confident employers and employees will recognise this as a factor in their bargaining.” Shorten also indicated he would pass on her proposal for consideration by the inquiry into the Fair Work Act which is currently under way.

The union movement does not and should not accept any trade-offs in future wage rises. The majority of workers have experienced a decline in real or nominal wages in recent years. Apart from the finance and mining sectors, the Australian economy is recessed.

Housing construction and manufacturing are in crisis, the retail sector is crying out for people to spend more, so too is tourism. Thousands of jobs are on the line, dependent on workers having the capacity to spend more. Holding down wages not only undermines living standards, it sinks the economy further into recession and results in more sackings, sees more people driven into poverty and losing their homes.

It’s time to tell double dipping bosses it’s not on. They have already had a series of tax cuts over successive years under Labor that were commenced by the Howard government. If they pay the super increases, they will still be ahead. At worst the payments will shave a little off their profits.

Next article – Communist trade union activists meet

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