Bill Shorten has taken aim at low wage growth and blamed employers for refusing to collectively bargaining with workers in a speech preaching the virtue of inclusive prosperity.
In his speech to the McKell Institute on Thursday, Shorten said fairness was a driver of growth, rebutting Coalition statements that Labor was not interested in “growing the pie”, merely redistributing wealth.
Shorten’s call to unfreeze a pause in wages also contrasted with statements by treasurer, Scott Morrison, that Australia should not grow incomes through a wage “explosion” or “inflation”.
Shorten made the comments in Sydney while launching a McKell Institute report that found middle-class incomes in Australia have gone backwards since the global financial crisis.
It found the average Australian annual income has declined about 2.7% since 2012 from approximately $67,900 (US$52,229) per annum to $66,500 (US$51,148), despite labour productivity continuing to exceed other comparable nations.
Shorten in part blamed the “flat” enterprise bargaining system, which he said was “going nowhere”.
“Employers who bargain are undercut by employers who don’t bother. Acquiescence with no bargaining is the new normal.
“Industry has opted for a wages pause – and is simply not renegotiating [agreements].”
Shorten noted the growing divide between the losers and winners from technological disruption such as cab drivers on the one hand and Uber on the other, or Ford and Holden workers as opposed to “preachers of disruption”.
He said the economy had a “soft underbelly” beneath the headline growth of 3.3%, announced on Wednesday.
Despite Australia having an unemployment rate of 5.7%, nearly 90% of jobs created in the past year have been part-time, Shorten said.
“Under-employment is at near-record levels and around a million Australians would like to be working more hours than they can currently find,” he warned.
Shorten said the labour market was leaving many behind including 2.5m workers who did not receive entitlements such as paid leave; three out of four people that didn’t meet the 10-year requirement for long-service leave; and 12% of workers who don’t receive superannuation.
He said Labor would stand against insecure work, casualisation and contracting-out, mentioning the Carlton United Breweries maintenance workers’ dispute as an example of those alienated by losing jobs.
On Wednesday the Australian Bureau of Statistics said compensation of employees rose by a modest 0.5% in the June quarter to be 3.1% higher through the year. It follows slow growth in number of hours worked (0.7%) and the wage price index (2.1%).
Morrison said Australia “needs to grow incomes … off the basis of improved growth in the economy and improved productivity”.
Asked if he wanted wages to rise, Morrison replied: “No, I don’t want see a wages explosion or a wage inflation.”
“I am not going to task the union movement to do that because they are always quite willing to go down that path.
“What I want to task the economy to do and support the economy to do is to see a real boost in wages by a real boost in productivity and a real boost in the earning performance of companies and our economy, and to see Australians benefit from that.”
Shorten advocated achieving growth through greater investment in public infrastructure, training Australians to use new technology, and supplying Asia with goods and services.
“Fairness is a growth strategy, not a growth dividend. Inclusion is a plan for prosperity, not one of the benefits,” he said.
Social policy and a strong safety net were not a matter of charity but “about investing and lifting people back into work and supporting their full participation in our economy and our society”.
In the speech, Shorten warned of a growing sense of disempowerment and disillusionment led by “extremists and demagogues from every point of the political compass”.
He said marginalised people had to feel “their efforts will be rewarded – that it is still possible to win when you play by the rules”.
“Fairness is therefore both an obligation and a necessity.”
Shorten said the task now was “to advance a new case for targeted growth and inclusive prosperity” and “debunk the old idea that Australia has to choose between fairness and growth”.
After the release of GDP figures on Wednesday the Australian Chamber of Commerce and Industry chief executive, James Pearson, said the figures showed that “business profits helped to drive stronger national income growth”.
“But we cannot afford to be complacent. Profit as a share of income is still well below its level over the past decade,” he said.
Pearson called on the government to boost international competitiveness through workplace relations reform, budget repair and cutting the company tax rate.
During the election campaign, Labor committed to set an objective test for determining when a worker is “casual”, which it said would prevent workers being exploited.
The Greens proposed giving new powers to the Fair Work Commission to order employers to create permanent jobs to replace casual employment and work on successive temporary contracts.