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2009 Wage Review heeds need for restraint

7 July 2009

DESPITE the Australian economy faring better than most, mounting unemployment pressures continue to depress the domestic market. These pressures weighed heavily in today’s Australian Fair Pay Commission (AFPC) wage freeze decision, consistent with the National Farmers’ Federation’s (NFF’s) submission.

Australian farmers, who employ some 300,000 Australians directly on farms, urged a wage freeze for the foreseeable future in a bid to provide respite for vulnerable businesses.

“It’s true that Australia has been shielded from the worst ravages of the global economic crisis, but jobs are still set to tumble over the coming year,” NFF President David Crombie said. “Today’s wage freeze will bolster the resilience of the jobs market.

“The Commission is to be commended for its fortitude in freezing wages. That said, in agriculture, the vast bulk of our 300,000 employees are skilled tradespeople and farm managers, with the overwhelming majority of those positions already paid well above minimum and Award rates.

“With farms predominantly small family-owned businesses still struggling through a 10th year of drought, the most drastically affected would be susceptible to any movements in wage levels. For those vulnerable businesses – as well as for local businesses that service the farm sector – escalating wages would put jobs at risk and curtail any future jobs growth.

“The global financial crisis and subsequent credit squeeze, on top of drought, have eliminated the capacity of rural employers to absorb further cost increases to their businesses. In these circumstances, many are left with no option but to terminate staff, typically affecting juniors and trainees.

“Such a result either sees senior staff under greater pressure in sharing the extra load or the farm simply reducing production levels through downsizing. We argued wage constraint could help save jobs now, but also, longer term, sustain the sector in having the capacity to grow – driving a jobs-led recovery out of drought and the financial crisis.

“With the national accounts illustrating just how important farm production is in keeping the economy ticking over, the last thing we need is wage growth further dampening confidence and shedding jobs.

“The NFF has certainly enjoyed the inclusive and consultative approach adopted by the AFPC and expect that process to continue under Fair Work Australia (FWA).

“While the make-up of the new Wage Review panel is yet to be announced, it has been indicated that particular expertise will be drawn from economic, social policy and business areas, rather than just enlisting lawyers and industrial advocates. That would be a welcomed move as part of FWA.”

The NFF’s submission to the AFPC 2009 Wage Review is available at: Submissions to Government.

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Media Enquiries: Brett Heffernan on (02) 6273 3855 or 0408 448 250.

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