Peter Costello calls for lower penalty rates to increase productivity

PIA AKERMAN
JUNE 03, 2014
THE AUSTRALIAN
PETER Costello has called for lower penalty rates as a priority to increase productivity, while declaring Tony Abbott safe as Liberal leader amid renewed leadership speculation.
Speaking at a Tourism and Transport Forum in Melbourne this morning, the former federal treasurer gave his views on the Abbott government’s first budget and the virulent reaction it has received from many quarters.
Mr Costello said discussion about how to grow the Australian economy was largely absent, and the issue of declining productivity had to receive a greater focus.
Push on Sunday penalties
“Productivity has been declining really now for seven or eight years,” he said.
“Personally because I believe so much employment is going to be in service industries, like tourism, like cafes … I think penalty rates and weekend loadings are something I would do if I wanted to encourage employment.”
Mr Costello suggested many of the young people working in part-time service sector jobs would be “happy to work” even if there was lower pay, saying most low-income earners did not plan to be stuck in low-paying jobs for long.
Earlier, Prime Minister Tony Abbott left the way open for changes to penalty rates to take place via the Fair Work Commission.
“I certainly think that we need to lift productivity and this is one of the big features of the budget — to lift productivity by building infrastructure, by ensuring that we live within our means, by getting taxes and regulations down over time.,’’ Mr Abbott told ABC radio.
“Yes, we must boost productivity if we’re going to pay our way in the world successfully, but penalty rates are a matter for the Fair Work Commission and people are perfectly entitled to bring applications to the Fair Work Commission to ensure that their businesses are profitable and they can continue to maximise employment.’’
But deputy Greens leader Adam Bandt slammed the push to lower penalty rates, saying it would be “the end of work-life balance” in Australia.
“If Tony Abbott gets his way with this back-room sponsored attack on people’s wages and conditions it’ll be the end of proper work-life balance in this country,” he said in Canberra this morning.
“The people who will be hit hardest are the women and children who rely overwhelmingly on penalty rates in order to get by.
“We shouldn’t be cutting people’s wages, we should be talking about how we can lift them.”
Mr Costello — who spent most of his years as Treasurer denying his ambitions to be Prime Minister — also said Malcolm Turnbull had turned speculation about his leadership aspirations into a bigger story this week in the manner of his denials, but Tony Abbott was safe from any challenge.
“Malcolm I think is determined to quash any idea of leadership speculation,” Mr Costello said.
“Sometimes you can protest too much.
“I think Malcolm wanted to really quash it, and as it’s turned out the quashing has probably made a bigger story “I do think Tony is very safe.”
Mr Costello renewed his criticism of the planned deficit levy and said there was no economic case for increasing the rate of the GST unless personal tax rates were lowered.
He said the government had struggled to sell the case for its tough budget by not emphasising the economic narrative behind it.
“Frankly if we don’t do something the budget might never balance again,” he said.
He made a gloomy prediction about the chance of reducing Australia’s debt to zero as occurred under the Howard government.
“I don’t think we’ll ever get back to that situation again, ever,” he said.
Additional reporting: Rosie Lewis