"Ross River virus affects more than 6,000 Australians every year. If we can find a way to prevent the virus surviving in mosquitoes we can stop it infecting humans.”22 May: There is no time to lose in overhauling the Australian Fair Pay Commission (AFPC), according to University of Canberra economist Professor Phil Lewis.
The AFPC is due to be abolished in 2010 and replaced by the Government’s new body Work Fair Australia, however Professor Lewis told a meeting of the Western Australian Branch of the Economic Society of Australia last night, the flaws in the AFPC must be immediately addressed.
The talk marks the second anniversary of the establishment of the AFPC and comes 12 months after Professor Lewis delivered his verdict on the AFPC’s first year, criticising it for failing to establish clear principles for setting the minimum wage.
“No principles at all were introduced by the AFPC, and the appearance of a system of ad hoc decision making process based on the personal views of the five commissioners is the essence of the system,” Professor Lewis, director of the Centre for Labour Market Research at the University of Canberra, said.
“This error should not be repeated by the ALP Government’s Work Fair Australia. The Government needs to learn from the AFPC’s mistakes.
“What is urgently needed if the new system to be implemented by the ALP government is to establish itself as a proper means of adjusting the minimum wage is a framework that others can understand, especially those who are compelled to pay the increase. There needs to be established a series of guidelines that others who are to be affected by such decisions are able to forecast outcomes which can be used in their own budgeting.
“It is important that a level of certainty be established so that business is not continually faced with an unpredictable change in costs based on a decision-making process for which there are no clear principles.
“Problems with the AFPC need to be addressed now, Australian workers, employers and the unemployed cannot afford to wait until 2010.”
The AFPC replaced many of the functions of the Australian Industrial Relations Commission (AIRC) in setting minimum pay and conditions but with an added term of reference, namely ‘The capacity for the unemployed and low paid to obtain and remain in employment’. According to Professor Lewis, this aim is at odds with the AFPC’s other functions.
“Adjusting the minimum wage should not be seen as an aspect of social welfare,” he said.
Professor Lewis believes policy should target low income households rather than low wage workers, who evidence suggests live in relatively high income households. Poor households tend to be poor because members are out of work, therefore more jobs rather than higher wages for those already in work should be the priority.
