Pm Attacked Over Minimum Wage

The Age

Thursday March 13, 2008

Misha Schubert, Political Correspondent, Canberra

PRIME Minister Kevin Rudd has been accused of thumbing his nose at Treasury advice to nominate a specific pay rise for low-paid workers, as business urged a $13-a-week increase - half the raise sought by unions.

The fight came as unions demanded company tax breaks be slashed for executive salaries over $1 million a year in a bid to share wage restraint fairly.

And new research touted in Parliament revealed that half the workers on WorkChoices employment contracts had been short-changed between $50 and $199 a week, while another 45% were paid up to $50 a week less than their due.

As the political spotlight shifted to the next minimum-wage decision ahead of tomorrow's deadline for submissions, Opposition treasury spokesman Malcolm Turnbull accused the Prime Minister of ignoring the advice of Treasury after pledging before the election to give the department a greater say in public policy.

He said cabinet rejected the Treasury call to nominate a dollar figure at its meeting on February 25.

Mr Rudd refused to deny the claim, arguing only that a government line was not yet final as unions insisted he had a responsibility to advocate a figure. But he lashed out at the Coalition - contrasting its claims to compassion on bonuses for carers and pensioners to its stance on workplace laws as he misrepresented Mr Turnbull's call for him to nominate a minimum wage rise.

"The new party born of compassion, which launched its birth notice last Friday, registered its death notice with its earlier remarks by (Mr Turnbull) that working families do not deserve a decent outcome when it comes to the minimum wage."

Amid speculation that Treasury had proposed an $18-a-week raise, Mr Rudd said only that the Government would push for a "fair and reasonable outcome".

The Prime Minister also renewed his call for wage restraint from the top end of town, warning he did not want to see the evolution of "two Australias" - one booming and the other in pain. Business rejected the union pay claim of $26 and the call for an end to tax breaks for million-dollar executive salaries as "kite-flying".

Australian Industry Group chief Heather Ridout branded the claim "economically risky" and proposed a "moderate and responsible" $13 increase instead.

Peter Anderson, from the Australian Chamber of Commerce and Industry, said the union claim would increase inflation by forcing small business to raise prices.

Meanwhile, Deputy Prime Minister Julia Gillard seized on research by the Workplace Authority to accuse the Coalition of hypocrisy in its claims of compassion over bonus payments for carers and seniors. A study of 670 Australian Workplace Agreements last year found some workers were underpaid more than $500 a week, prompting Ms Gillard to claim the Coalition delighted in ripping off workers under WorkChoices.

Separately, former Labor adviser Nicholas Gruen, now at Lateral Economics, urged a pay freeze for the low-paid because they were already getting tax cuts. "We've provided very generous compensation," he told The Age. "Some families' take home pay packet has gone up by as much as 10% over the last three years. It makes sense in that context to try and rebalance the safety net away from wages towards a tax and transfer system." -- With NASSIM KHADEM

KEY POINTS

? Workers short-changed by WorkChoices, says report.

? Unions target executives.