Workers’ superannuation balances and the government’s super tax take could be slashed by $130 billion by employer-driven reductions, according to a new report by the Australia Institute.
The report, commissioned by the Transport Workers Union, highlights wage freezes, cuts to penalty rates, the pushing of workers off enterprise agreements onto less favourable awards and wage theft through illegal underpayment of drivers on low-pay deals.
It singles out state governments and a number of companies implementing absolute or above-inflation wage freezes.
They include Qantas, which implemented an 18-month wage freeze, and aviation services provider Aerocare, which has been accused of recruiting workers on below award conditions.
Streets Ice Cream, Griffin Coal, transport group Aurizon and Murdoch University have also been named as suppressing wages by cancelling enterprise agreements.
In Griffin Coal’s case, the dissolution of an EBA left workers facing a 43 per cent wage cut and Murdoch University’s move to do the same could see workers with 39 per cent wage reductions, the report found.
Even new EBAs don’t necessarily protect employees, with gas workers in Victoria facing 30 per cent pay cuts in a new agreement, the report said.
Moves by the Fair Work Commission and employers to cut penalty rates on weekends are also forcing down workers’ incomes.
The report’s author, Dr Jim Stanford, said a lack of workforce bargaining power was driving the situation.
“This can only happen when there is a desperate shortage of jobs … [that creates] an amenable labour market and the approval of regulators to do it,” Dr Stanford said in the report.
A Qantas spokesperson defended the company’s decision to temporarily freeze wages, adding that it had implemented initiatives to “help close the deficit in women’s retirement balances”.
“Wage freezes of 18 months at Qantas were needed to make our cost base more competitive compared with the rest of the industry and ultimately make 30,000 jobs more sustainable,” the spokesperson said.
“Once we returned to profit, employees were offered a 5 per cent bonus in recognition of the wage freeze plus two more profit-related bonuses worth $5000 including superannuation,” the spokesperson told the ABC.
Cuts in wages or in wages growth mean super balances are lower than they would otherwise be.
The report estimates that a 40-year-old worker subject to one of the simulated wage-suppressing measures would see superannuation on balances cut by between $30,000 and $270,000 by the time they retire, depending on their situation.
Workers forced onto less favourable awards from EBAs could lose the $270,000 from their retirement balance if the situation lasted through their whole working life.
Temporary wage freezes could lead to losses of $30,000 and wage thefts such as those uncovered at Dominos, 7-Eleven and Caltex could take $50,000 from a retirement balance.
The Fair Work Commission’s cut to penalty rates could result in 500,000 workers retiring with $34,000 less in their super accounts than had they been paid their full entitlements.
Overall wage suppression measures, both legal and illegal, could affect 3.25 million workers and result in losses to workers of up to $102 billion over their working lives.
The loss to government through lower superannuation tax collections could be as high as $37 billion, the report found.
The study was commissioned by the TWU as it is locked in a long-running battle with Qantas and its outsourcing partner Aerocare over worker pay and conditions.
The union’s national secretary, Tony Sheldon, told ABC radio that “this is a race to the bottom on lower wages and conditions” that would harm workers’ retirement incomes.