Australian Fair Pay Commission
Encyclopedia
The Australian Fair Pay Commission (AFPC) was an Australia
n legislative body created under the Howard Government
's "WorkChoices
" industrial relations law in 2006 to set the minimum rate of pay for workers. Established to replace the wage setting functions of the Australian Industrial Relations Commission
, the AFPC set and adjusted a single adult minimum wage, non-adult minimum wages (such as training wage), minimum wages for award classification levels and casual loadings. The AFPC was abolished in December 2009 when the wage setting function was given to the Minimum wage panel of Fair Work Australia.
Professor Ian Harper
was the inaugural chairman of the AFPC, presiding over 4 commissioners: Mr Hugh Armstrong, Mr Patrick McClure AO, Mr Mike O’Hagan, and Professor Judith Sloan. In a speech to the Centre for Independent Studies
titled "Christian Morality and Market Capitalism: Friends or Foes", Harper stated "The market is a means to an end rather than an end in itself" and "The trouble starts when one begins to treat market capitalism itself as a religion".
The profile of the members of this commission was different from that of the Australian Industrial Relations Commission
which previously had responsibility for determining the above quantities. There was less representation on behalf of the trade unions, and less transparency in decision-making, making it possible for the Australian Fair Pay Commission to make judgements with no community oversight or consultation. Unlike the Australian Industrial Relations Commission
, the commission funded substantial research on the economic effects of raising the minimum wage, and proponents claimed that this placed more of an emphasis on determining whether the economic evidence suggested that raising the minimum wage made the poor better off.
Critics argued that the board lacked independence and scope and that it reduced the benefits of workers, while supporters believes that stimulated the economy and improved working conditions.
In hourly terms, the Australian federal minimum wage will increase to $13.47 per hour (for workers on pay scales of less than $700 per week). The decision took effect on 1 December 2006.
Many commentators were surprised that the AFPC's first decision was so large. For example, the Australian Council of Trade Unions had asked for a minimum wage increase of $30 per week. Despite this, the rise barely kept up with inflation since the previous pay rise handed down by the AIRC in June 2005.
The AFPC took into account the time period between the inaugural and second wage decisions, and other factors including tax cuts announced in the budget that take effect from 1 July 2007. The AFPC, whilst considering these matters, did not discount the wage increase on account of tax cuts.
Another historic feature of the decision was that for the first time, farmers were granted a deferral from the wage increase on account of severe drought. Incapacity to pay had been argued numerous times over the last twenty five years, for the most part unsuccessfully, before the Australian Industrial Relations Commission. The AFPC's decision granting the deferral was therefore a landmark in the history of industrial relations for the National Farmers' Federation.
expressed his concern about Professor Harper's ability in an interview with Radio National
's Mark Colvin.
The current Minimum wage for Australia is $14.31 which came into effect on 1 October 2008.
Australia
Australia , officially the Commonwealth of Australia, is a country in the Southern Hemisphere comprising the mainland of the Australian continent, the island of Tasmania, and numerous smaller islands in the Indian and Pacific Oceans. It is the world's sixth-largest country by total area...
n legislative body created under the Howard Government
Howard Government
The Howard Government refers to the federal Executive Government of Australia led by Prime Minister John Howard. It was made up of members of the Liberal–National Coalition, which won a majority of seats in the Australian House of Representatives at four successive elections. The Howard Government...
's "WorkChoices
WorkChoices
The Workplace Relations Act 1996, as amended by the Workplace Relations Amendment Act 2005, popularly known as Work Choices, was a Legislative Act of the Australian Parliament that came into effect in March 2006 which involved many controversial amendments to the Workplace Relations Act 1996, the...
" industrial relations law in 2006 to set the minimum rate of pay for workers. Established to replace the wage setting functions of the Australian Industrial Relations Commission
Australian Industrial Relations Commission
The Australian Industrial Relations Commission, or AIRC , was a tribunal with powers under the Workplace Relations Act 1996. It was the central institution of Australian labour law...
, the AFPC set and adjusted a single adult minimum wage, non-adult minimum wages (such as training wage), minimum wages for award classification levels and casual loadings. The AFPC was abolished in December 2009 when the wage setting function was given to the Minimum wage panel of Fair Work Australia.
Professor Ian Harper
Ian Harper
Ian Harper FASSA FAICD is an Australian economist. He was the inaugural chairman of the Australian Fair Pay Commission before that body was abolished in 2009....
was the inaugural chairman of the AFPC, presiding over 4 commissioners: Mr Hugh Armstrong, Mr Patrick McClure AO, Mr Mike O’Hagan, and Professor Judith Sloan. In a speech to the Centre for Independent Studies
Centre for Independent Studies
The Centre for Independent Studies is a libertarian think tank founded in April 1976 by Executive Director Greg Lindsay. The CIS is one of six think tanks recognised by the National Institute for Research Advancement in Tokyo, Japan...
titled "Christian Morality and Market Capitalism: Friends or Foes", Harper stated "The market is a means to an end rather than an end in itself" and "The trouble starts when one begins to treat market capitalism itself as a religion".
The profile of the members of this commission was different from that of the Australian Industrial Relations Commission
Australian Industrial Relations Commission
The Australian Industrial Relations Commission, or AIRC , was a tribunal with powers under the Workplace Relations Act 1996. It was the central institution of Australian labour law...
which previously had responsibility for determining the above quantities. There was less representation on behalf of the trade unions, and less transparency in decision-making, making it possible for the Australian Fair Pay Commission to make judgements with no community oversight or consultation. Unlike the Australian Industrial Relations Commission
Australian Industrial Relations Commission
The Australian Industrial Relations Commission, or AIRC , was a tribunal with powers under the Workplace Relations Act 1996. It was the central institution of Australian labour law...
, the commission funded substantial research on the economic effects of raising the minimum wage, and proponents claimed that this placed more of an emphasis on determining whether the economic evidence suggested that raising the minimum wage made the poor better off.
Critics argued that the board lacked independence and scope and that it reduced the benefits of workers, while supporters believes that stimulated the economy and improved working conditions.
2006 decision
On 26 October 2006, the AFPC handed down its first decision. The AFPC's media release stated:
The Australian Fair Pay Commission today announced an increase of $27.36 per week in the standard Federal Minimum Wage and in all Pay Scales up to $700 per week. This covers just over one million Australian workers who rely on the Commission’s decisions for adjustments in their wages.
The Commission also awarded an increase of $22.04 per week to all Pay Scales paying $700 per week and above, or more than $36,000 per year, representing another 220,000 workers, about 2% of the workforce.
In hourly terms, the Australian federal minimum wage will increase to $13.47 per hour (for workers on pay scales of less than $700 per week). The decision took effect on 1 December 2006.
Many commentators were surprised that the AFPC's first decision was so large. For example, the Australian Council of Trade Unions had asked for a minimum wage increase of $30 per week. Despite this, the rise barely kept up with inflation since the previous pay rise handed down by the AIRC in June 2005.
2007 decision
On 5 July 2007, the AFPC handed down its second wage decision. The decision increased minimum wages from $13.47 to $13.74 per hour, or $10.26 a week for wages below $700, and by $5.30 for wages above $700. The rise took effect from the first pay period commencing on or after 1 October 2007. This was a change of policy from the AFPCs first decision, which took effect on the 1 December 2007 and was criticised by employer groups for causing difficulties for businesses, which had to implement a pay rise within a pay period. Traditionally, the Australian Industrial Relations Commission implemented wage and allowance rises from the first 'pay period commencing' from a set date.The AFPC took into account the time period between the inaugural and second wage decisions, and other factors including tax cuts announced in the budget that take effect from 1 July 2007. The AFPC, whilst considering these matters, did not discount the wage increase on account of tax cuts.
Another historic feature of the decision was that for the first time, farmers were granted a deferral from the wage increase on account of severe drought. Incapacity to pay had been argued numerous times over the last twenty five years, for the most part unsuccessfully, before the Australian Industrial Relations Commission. The AFPC's decision granting the deferral was therefore a landmark in the history of industrial relations for the National Farmers' Federation.
Australian trade union reaction to the creation of the AFPC
Australian trade unions view the AFPC as a conservative business-friendly organisation that threatens the basic rights, pay and entitlements of Australian workers. Further, they argue that the FPC will benefit business at the expense of workers. Unions mockingly call the AFPC the Australian Low Pay Commission. Unions view the IRC as independent and wish to keep it as the minimum wage setting body. ACTU's Greg CombetGreg Combet
Gregory Ivan Combet AM MP is an Australian politician and trade unionist. He was Secretary of the Australian Council of Trade Unions between 2000 and 2007...
expressed his concern about Professor Harper's ability in an interview with Radio National
Radio National
ABC Radio National is an Australia-wide non-commercial radio network run by the Australian Broadcasting Corporation.Radio National broadcasts national programming in areas that include news and current affairs, the arts, social issues, science, drama and comedy...
's Mark Colvin.
The current Minimum wage for Australia is $14.31 which came into effect on 1 October 2008.
See also
- Australian Government
- Australian Labor PartyAustralian Labor PartyThe Australian Labor Party is an Australian political party. It has been the governing party of the Commonwealth of Australia since the 2007 federal election. Julia Gillard is the party's federal parliamentary leader and Prime Minister of Australia...
- Liberal Party of AustraliaLiberal Party of AustraliaThe Liberal Party of Australia is an Australian political party.Founded a year after the 1943 federal election to replace the United Australia Party, the centre-right Liberal Party typically competes with the centre-left Australian Labor Party for political office...
- ACTU