Wage decision a major blow to farmers
5 May 2004
Today’s decision by the Australian Industrial Relations Commission to increase the minimum wage by $19 per week has dealt a major blow to a farm sector still badly affected by drought, according to the National Farmers’ Federation.
“The decision to award a record increase in the minimum wage is a major blow to rural employers who are looking for positive signs to recover from drought and NFF fears that this will lead to further job losses in rural Australia,” NFF Industrial Committee Chair, Mr Duncan Fraser said.
“This will be a major dampener on any ability for farmers and other rural employers to increase employment in the agricultural sector, which lost 100,000 jobs during 2002-03 due to the drought according to latest Treasury figures.” Mr Fraser said the Commission appeared to have overlooked the fact that substantial parts of Australia were still in drought and that there were indications of re-emerging drought conditions, particularly in areas of New South Wales and Victoria.
“The Commission appears to rely on a 21.1 per cent increase in farm Gross Domestic Product in the year to December 2003 to reflect a recovery in the rural economy from drought,” Mr Fraser said. “Not only does this percentage increase come off a very low base, this simplistic analysis also fails to acknowledge regional differences in that significant parts of Australia are still in drought and drought is emerging in other areas. As the Commission has acknowledged, there are risks associated with the inflationary effects of the rise in the Australian dollar and the pace at which parts of the rural economy can recover from drought.”
Contrary to the Commission’s assertion that it was unconvinced that previous wage increases had had a significant negative effect on employment, research commissioned by NFF clearly found that any wage increase would have a significant effect on farm employment.
“Research undertaken on behalf of NFF showed that a 1 per cent increase in wages would correlate to a fall in farm employment of between 0.6 to 1.5 per cent,” Mr Fraser said. “Given this, a wage increase of $19 per week is likely to be a significant dampener on farm re-employment. The timing of this wage increase could not have been worse for Australian farmers and for the workers who rely on the agricultural sector for employment.”
NFF News Release, 7 June 2004
by Mairi Barton, General Manager Public Relations, NFF
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