SPC Ardmona factory in Victoria: The company is being urged to cut its workers’ pay. Photo: Jason SouthThe Abbott government pressed SPC Ardmona to slash pay for workers by as much as 40 per cent under a radical bailout plan for the food processor.
Three union officials said they had meetings with SPC Ardmona managing director Peter Kelly before Christmas in which Mr Kelly said he was being pressed by the Abbott government to put workers on the award if the company wanted a $25 million subsidy.
Other sources involved in the restructure have independently confirmed the Abbott government’s pay push at SPC Ardmona.
Moving workers on to the award would have dramatically cut living standards for staff at the Shepparton plant with pay cuts of $20,000 to $30,000 a year for many. Other sources have confirmed the radical push while Industry Minister Ian Macfarlane refused to directly answer questions on the subject.
On Wednesday Mr Macfarlane stepped up warnings by the government about high labour costs. ”I do want to reduce labour costs but it’s not necessarily reducing wages,” he said. ”If we boost our productivity, if we increase the number of units that a person produces, then wages can remain stable, but we do have to have competitive working conditions and we do have to make sure that some of the things that have happened in industry in Australia in the past are addressed.”
Treasurer Joe Hockey said costs were too high. “We do have a high Australian dollar,” he said. ”We’ve got to reduce our costs of making things in Australia.”
The ministers’ comments come amid fresh signs of Australia’s weakening labour market, which has been hit by the announcement of large job losses at Alcoa, Toyota, Holden and Telstra. The wage price index rose just 2.6 per cent last year, the slowest growth in the 16-year history of the series.
The Abbott government has repeatedly criticised workplace agreements at Toyota, Holden and SPC Ardmona for being too generous. It has also urged the Fair Work Commission to take heed of the concerns of business – particularly in the retail and hospitality sector – about penalty rates and the softening economy and labour market as it reviews modern awards.
If SPC Ardmona workers had been moved on to the award, pay for a level-two process worker would have been cut from about $50,000 a year to $33,000. For higher-paid maintenance workers, the falls would have been even more dramatic, dropping from as much as $85,000 a year to about $50,000.
Electrical Trades Union state secretary Troy Gray said the SPC Ardmona boss had told him he had meetings with senior government figures including Mr Macfarlane.
”Kelly said to me the government has made a demand that workers be put on the award,” Mr Gray said. ”He said, ‘I don’t think the government understands what that means …’
”After he [Kelly] explained it to the government, it was clear they understood it would mean a pretty severe reduction in wages.”
Mr Gray said the government was trying to push through industrial relations reform by pressing distressed companies to slash wages and conditions in exchange for financial support.
”This is Work Choices mark II by stealth. It’s disgusting, to be honest,” he said.
Labor’s employment and workplace relations spokesman, Brendan O’Connor, said Prime Minister Tony Abbott had previously attacked publicly the ”modest pay and conditions” of SPC workers.
”[And] Mr Hockey has made it clear that he supports a race-to-the-bottom approach to workers’ wages and conditions in this country,” Mr O’Connor said.
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