Government’s IR reforms will improve individual lives and strengthen the economy

The McKell Institute

The Australian economy will be fairer and more efficient as a result of the federal government’s industrial relations reforms passed today, according to the McKell Institute.

The McKell Institute has long recommended policy change in the areas of wage theft and labour hire loopholes, which have led to widespread exploitation and have cost the economy billions of dollars in recent years.

The McKell Institute’s chief executive, Edward Cavanough, said the changes introduced by the parliament today would make a material difference to the problem.

“Our most recent analysis indicted Australian workers were being underpaid nearly $850 million a year. That’s money that should have been alleviating the cost of living for low-income workers. Instead it’s been cushioning company profits,” Mr Cavanough said.

“We’ve long understood the policies that would make a difference to this scourge, and the Mckell Institute has published a lot of compelling research. But it is only this current federal government that has had the courage and persistence to turn those ideas into law. Minister Tony Burke and the crossbench senators have written an important chapter in Australian industrial history today.

“Since federation Australia has prided itself on being a country that rewards a fair day’s work with a fair day’s pay. It’s heartening to see those values are alive and well today.”

Mr Cavanough said the reforms around closing labour hire loopholes that have led to the erosion of wages in the mining sector were vital.

“In 2020, we looked at how the use of labour hire casuals in mining had affected wages in the NSW Hunter Valley and regional Queensland. We found some $825m a year was missing local economic activity as a result of loophole exploitation,” Mr Cavanough said.

“Multinational mining interests have been trousering benefits that should have been flowing into mining communities. It has been blatant gaming of the system and it needed to be fixed.

“However, it’s one thing to know what will work and quite another to introduce real change. Standing up the mining lobby in Australia requires genuine political courage and that’s what we’ve seen today.

“The legislation passed today consists of sensible, evidence-based reforms. Holding employers criminally responsible for deliberate wage theft and paying labour hire workers the same as direct employees for the same job makes sense.

“The reforms will benefit not just individual workers, but the Australian economy as a whole.”

/Public Release.