The IR Bill- two problems and a suggestion
25 November 2022
When I buy petrol, I sometimes ask the attendant how much he or she is paid. Often they glance at the CCTV camera and say that they cannot answer that. But the other morning early I asked an attendant who looked like a very tired student from the Indian subcontinent. Yes, she had worked all night, a 12 hour shift for $10/hour cash. I asked her how she thought she might get a decent wage. She replied, ‘Well, an Australian boss might help’. I took this to mean someone who paid an award wage.
As small business tries hard to exempt itself from ‘sector-wide’ bargaining, I wondered how she will fare if there is still no industry-wide award or no enforcement. What will change?
I have a friend who runs a small business and he says that although wages have not risen, neither have small business profits. I asked why? He said that the supply chain had ‘consolidated’ and took a larger share of the final price. One might note that Deliveroo just left food delivery, Amazon is taking an increased percentage of online retail sales, Airbnb takes an increasing percentage of accommodation spending, Uber has increased its percentage take from its rides, and Spotify pays very little to those who make their music. It is the Monopoly game in real life, the big get bigger and the frail are pressed to the rail. The view that the biggest problem small business has is big business seems a neglected truism. The question is whether this will or indeed can be addressed by Federal Parliament. The point is that competition drives down prices, but cartels and oligopolies develop if not stopped. A new book looks at this problem, Chokepoint Capitalism www.thesaturdaypaper.com.au/culture/books/2022/11/30/chokepoint-capitalism#mtr
Another aspect is that the system seems totally unable to restrain is the salaries of top executives. One person I know advised, ‘I always vote against the management salary increases at the AGM’. There is legislation that salary rises have to be approved by the shareholders, but it seems that the top executives always have enough proxies to ensure that they salary rises come despite the efforts of small shareholders like my friend. So I suggest legislation that stipulates that no executive may get more money than, say, 20 times the full time equivalent hourly rate of the lowest paid person in the organisation. It seems that a few hundred thousand at the top does not matter, but a few dollars at the bottom do. This needs to brought into perspective.