Labor and Greens give notice of bills to legislate that penalty rate cuts must not affect workers’ take home pay

This article is more than 3 years old

This article is more than 3 years old

Labor will push ahead this week with a bill preventing penalty rate cuts that reduce take-home pay. However crossbench senators oppose moves by Labor and the Greens that they say interfere with the independence of the industrial umpire.

Nick Xenophon told Guardian Australia on Sunday that he would consider Labor’s proposal to require benefits to offset cuts to penalty rates but he believed it was a “mistake” to override the independence of the Fair Work Commission.

As politicians prepare for a busy sitting week in Canberra, the government has signalled it will continue to lobby the crossbench to pass its omnibus welfare bill, currently before the lower house and facing opposition from Pauline Hanson’s One Nation and the Nick Xenophon Team in the Senate.

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Senate estimates hearings throughout the week will probe the whole operation of government, with Labor seeking answers on Australia Post executive salaries, pension and welfare cuts and the United States refugee deal.

On Thursday the Fair Work Commission decided to cut Sunday and public holiday penalty rates by up to 50% in the retail, pharmacy, hospitality, and fast food industries.

On Friday the Greens responded with a bill to lock penalty rates in at 2017 levels, overriding the cut, and on Monday Labor will give notice of its own bill to protect penalty rates.

Labor believes the bill, if legislated before the FWC finalises the transitional arrangements and orders, will effectively prevent the decision from taking effect by requiring that penalty rate cuts cannot result in a cut in take home pay.

On Friday senator Jacqui Lambie bolstered those efforts to protect penalty rates, saying there was “no way” she could support the Sunday penalty rate cut.

“Apart from the fact that the proposed decrease in Sunday penalty rates will hit Tasmanian battlers the hardest … the extra money made by workers on a Sunday through penalty rates very quickly finds its way back into the local economy and small business community,” she said.



But the rest of the crossbench is opposed, with senators as diverse as One Nation’s Brian Burston, the Justice Party’s Derryn Hinch and Nick Xenophon all backing the independent Fair Work Commission.



On Sunday Hinch told Guardian Australia the FWC was “supposed to be independent” and noting that before the election Shorten had said that “if elected as prime minister he would support [its] decision”.

Xenophon – who introduced a bill to lower penalty rates for small businesses in 2012 – said that he now recognised that legislating rates was “the wrong approach”.

“I need to see the [Labor] legislation but as a general principle it is a mistake to legislatively override the independence of the Fair Work Commission, given its principles.”

Xenophon said the commission was still considering an adequate phase-in, which could last up to five years, to minimise negative impacts on workers.

Speaking on Sky News on Sunday the finance minister, Mathias Cormann, said the government respected the commission’s decision but it was “not our job to back it in” by applauding the cuts in public.

Asked if the government would consider tax increases if the crossbench continued to block its welfare bill, Cormann said negotiations were still ongoing and “I’m certainly not prepared to put up the white flag”.

“We’ll do the absolute best we can to get as much of our agenda through the Senate as possible,” he said.

The government’s omnibus savings package includes multibillion-dollar cuts to family tax benefits, paid parental leave and unemployment payments, with some of that money used to pay for extra funding for childcare.

Cormann noted that Xenophon had called for a small increase in the Medicare levy instead of welfare cuts, but said it was “not a proposition of the government”.

Asked if the government planned to lift the Medicare rebate freeze, Cormann said the budget would contain the government’s policy but the government “can’t afford to spend any more money on any measure” unless further savings were made.

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Although the moves to protect penalty rates cannot pass the lower house and also lack Senate support, Bill Shorten will use the cuts to paint Malcolm Turnbull as out of touch and set up an attack into the next election that the Coalition allowed workers’ take-home pay to be cut.

The opposition leader said the prime minister was treating the 700,000 Australians who faced a penalty rate cut as “just numbers on a spreadsheet”.

“These people have bills to pay and families to support – and every single one has less money in their pocket as a result of this dreadful decision.”

The Greens industrial relations spokesman, Adam Bandt, claimed credit for Labor promising to protect penalty rates, calling it a flattering imitation of the policy his party had taken to the 2016 election.

“We have successfully pulled Labor around from supporting the FWC decision just a few months ago to now copying our legislation to stop these devastating cuts,” he said.