Assistant Treasurer Bill Shorten in his Parliament House office in Canberra yesterday. Picture: Kym Smith. Source: News Limited
ASSISTANT Treasurer Bill Shorten has accused employers of failing to properly utilise flexibility provisions within Labor’s industrial relations laws and of discriminating against mature and disabled workers.
Rejecting business sector complaints that the Fair Work Act was too inflexible to promote productivity gains, Mr Shorten has also warned that factors including infrastructure and shortages of skilled labour have a greater effect on holding back productivity.
Mr Shorten, a former Australian Workers Union national secretary, made the comments in an interview with The Australian yesterday.
He also vowed to “finish the job” on Paul Keating’s superannuation revolution, revealing that Labor’s plan to lift the superannuation guarantee from 9 per cent to 12 per cent would cause growth in spending on age pensions to begin to fall as early as 2017.
While employers last night maintained their criticism of the Fair Work Act, they backed Mr Shorten’s concerns about discrimination against mature jobseekers. And the government’s hand-picked adviser on ageing, Everald Compton, said age discrimination among employers was “rampant” and that human resources officers in most companies were “primitive” in their attitudes.
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For months, business groups have complained that Labor’s Fair Work Act, which promotes collective bargaining, does not provide enough flexibility to encourage businesses to take on more staff.
But Mr Shorten said the criticism was wrong and that employers should use the system.
“I’m not convinced that the industrial relations system is what’s holding back productivity . . . capital investment in technology and skills development can enhance systems,” Mr Shorten said.
“I think a lot of employers are reluctant to bargain. I’m not sure everyone picks up the bargaining process the way it should go.”
Mr Shorten said the Fair Work Act offered opportunities for employees and employers to “do very good things for the wealth of businesses” and that the system of industrial awards had been “pretty pared back”.
Mr Shorten said there was nothing in the industrial relations system preventing the type of flexibility needed to lift employment of mature workers or the disabled — identified by Julia Gillard a fortnight ago as critical to lifting workforce participation to address labour shortages.
“What I think prevents older Australians getting jobs is an attitude of discrimination against older people,” Mr Shorten said.
“If you’re an older employee who’s come from one industry to another, it’s hard to get an interview. It’s the same with people with disabilities. They just don’t get in the door. I know lots of talented older people who just can’t get the interviews.”
Australian Chamber of Commerce and Industry chief executive Peter Anderson said that while infrastructure and technology affected productivity, industrial relations laws represented the “third leg to the productivity stool”.
However, he said Mr Shorten was correct to note that industry had “some poor attitudes” towards the employment of aged and disabled workers.
Mr Compton, a former chairman of the National Seniors Association who is researching impediments facing mature jobseekers for Wayne Swan, said Mr Shorten was “dead right”.
“I reckon Australia loses at least $10 billion a year in GDP because we don’t let seniors get into the workforce,” he said.
Mr Shorten also said he was intent on delivering Labor’s promise to lift the superannuation guarantee — money paid by employers into workers’ superannuation funds — from 9 per cent to 12 per cent, despite the opposition’s rejection of the plan.
Under the Keating reforms, backed by unions, the guarantee rate rose from 3 per cent of ordinary time earnings in 1991 to 9 per cent by 2002-03.
The reforms have created about $1.3 trillion in savings. While Mr Keating’s ultimate vision was for the rate to rise to 15 per cent of earnings, Labor went to last year’s election promising to progressively lift it to 12 per cent between 2013 and 2019.
Yesterday Mr Shorten said 12 per cent was the government’s aim in the current economic circumstances. He said previously unreleased Treasury modelling showed that if the plan went ahead, growth in the burden on taxpayers to fund aged pensions would begin to fall from 2017.
By 2030, taxpayers would be saving $10bn a year on what the cost burden would have been had the guarantee not been put in place.
“What we’re doing is getting Australians to save for themselves a better replacement rate for retirement and this is fundamentally shifting government finances,” Mr Shorten said.
“I think Australians get that to have a well-funded social security system is going to cost.
“But if people don’t save for themselves, it’ll put even greater burden on the funding of the social security system.
“The social security system should be for the poor. We’ve got over time the ability of the middle class to save — superannuation, private savings, the benefit of compound interest and dividend imputation — that’s the strategy and that will actually reduce the tax burden on Australians.”