The letter – signed by leading economists from universities, think tanks and consultancies across the country – says the decision will not deliver any meaningful boost to employment and will ultimately undermine household incomes and national economic growth. Former Reserve Bank governor Bernie Fraser. Credit:Josh Robenstone "While it is doubtful that lower penalty rates will result in any measurable increase in total employment in the retail and hospitality industries there is no doubt that this decision will reduce incomes for some of the most insecure and poorly paid workers in the economy," it reads. But the widely respected Mr Fraser – who served both Liberal and Labor governments as a public servant for 35 years – has gone even further, extending his criticism to the government and the business community for supporting the cuts. "It was another illustration of what I'm afraid is an increasing trend towards unfairness in so many ways in policy matters," Mr Fraser said. "Some people now have much more than they really need and so many more have not even enough to get through.

"And you contrast that with the government's position to commit – at this stage – $25 billion to reduce company taxes. Who are the recipients of those cuts? Illustration: Ron Tandberg "The main recipients will be the dividend holders – not traditionally a disadvantaged, vulnerable section in the community. And the other people who will benefit will be the senior executives of those companies giving themselves bonuses. "All the while the vulnerable people are being squeezed at the other end." There's no mention of clawing back the unpaid taxes Prime Minister Malcolm Turnbull alluded to on radio. Credit:Andrew Meares

While he says he respects the Fair Work Commission's independence, Mr Fraser suggested the strong submissions from the business community led them to the wrong decision. He also says the company tax cuts will deliver minuscule benefits off "in the never never". Meanwhile the inequality gap is only widening as the ruling class looks after themselves rather than the vulnerable and needy. Genuine gains in income and wealth eroded The genuine gains in income and wealth of the 1960s, '70s and '80s are being steadily eroded. "Since the late '80s it's all reversed and it's getting worse and that worries more in terms of implications for opportunities and for the way different groups are going to struggling the future and the broader consequences for society might be.

"We're not quite at the danger point yet but we're moving in that direction – and that's a real worry." The penalty rate letter was organised by Stephen Koukoulas, managing director of Market Economics and former economics adviser to Julia Gillard. He says consumer spending is the main driver of employment in the retail and hospitality industries, not wage fluctuations, and the cut will only lead to increased welfare payments and reduced income tax revenues. The letter also warns the precedent established by the commission's decision will embolden other employers to invoke the same rationale for lower penalty rates. Mr Fraser is also a former head of the Climate Change Authority, resigning in 2015 because of the then Abbott government's approach in that policy area. He subsequently criticised Prime Minister Malcolm Turnbull for losing his "courage" on climate change.

He had another run in with the government in February after it dismissed his long-awaited review into industry super funds as a "lobbying document".