23/06/2017 12:19 PM AEST | Updated 23/06/2017 6:01 PM AEST

Politicians To Get Pay Rise On Same Day Of Penalty Rate Cut

Malcolm Turnbull is getting a raise and a tax cut on the same day.

Fairfax Media
Opposition Leader Bill Shorten and Prime Minister Malcolm Turnbull are getting pay rises.

Despite efforts from Labor this week to block the impending cuts to penalty rates, thousands of Australians are bracing for a hit to the wallet when their pay for working weekends and holidays is trimmed back on July 1. Coincidentally, this is exactly the same day the nation's federal politicians will receive a pay rise, and a tax cut.

In a bizarre and ironic piece of timing, in just eight days time, some of the nation's lowest paid workers in the retail, hospitality and fast food sectors will have their penalty rates scaled back -- while the base pay for politicians will rise to over $200,000 for the first time, and the Prime Minister scores a $10,000 raise. It is also the same day the government's deficit levy, essentially an extra tax on the highest-paid Australians (including politicians) expires, which means our representatives in Canberra will score a double-whammy of a pay rise and a tax cut on the same day.

"The Tribunal has decided to increase remuneration by 2 per cent for public offices in its jurisdiction, with effect from 1 July 2017," the Remuneration Tribunal announced on Thursday.

But not everyone is a fan of the decision. One Nation's senator Malcolm Roberts tweeted on Friday that he will look to opt-out of, what he calls, "the unfair pollie pay rise" and has asked parliamentary services to "look for a solution".

The changes will see Malcolm Turnbull's pay packet rise to $527,000 a year, and he's also getting a tax cut of nearly $7000 thanks to the removal of the deficit levy. Opposition leader Bill Shorten is in line to get $375,000 after the pay rise of $7300, and will also enjoy a tax cut of nearly $4000. The base pay for an MP or senator, currently $199,000, will rise to $203,000.

It must be noted that this is the first pay rise for our federal politicians in a while. The last bump in pay was in January 2016, which was another two percent, and the July 1 pay rise is only the third since July 2013.

" Over the past year there has been a notable increase in submissions to the Tribunal seeking higher remuneration for offices and individual office holders based at least in part on private sector remuneration. As well as achieving an appropriate balance in the assessment of both private and public sector wage movements, the Tribunal must make its assessment of wages and other economic considerations based not just on past experience but also on predictions of future movements," the tribunal said in explaining its reasoning for awarding the pay rise.

"The Tribunal is also conscious of the Government's policy of wage restraint applying to APS and non-APS agencies."

Again, this will come on the same day that thousands of workers will have penalty rates cut. As announced by the Fair Work Commission in February, employees in the retail, fast food and hospitality industries will have their Sunday and public holiday rates slashed.

Labor, supported by Coalition MP George Christensen, had tried to pass legislation protecting penalty rates this week. However, the government opposed the move, ensuring the vote failed. Unions, however, are not giving up the fight. United Voice, which represents the hospitality sector, and the Shop Distributive & Allied Employees Association (SDA), representing retail workers, have lodged separate legal challenge to the cuts in the Federal Court.

"We are compelled to take this legal step. We cannot accept these cuts which impact so dramatically on workers," said Jo-anne Schofield, National Secretary of United Voice.

"The Fair Work Commission's decision to cut pay is significant. It symbolises a turning away from a long-held principle that has guided industrial law in this country for over a century - that the needs of workers should be placed on an equal footing with business and economic interests. The decision is also completely out of step with community expectations. Weekends still mean something in Australia and the people who give up time to work on weekends deserve to be fairly compensated for this."

"This should put employers on notice - we will not accept their attempts to undermine basic working rights and conditions. Hospitality workers, through their union, have been fighting the attempts by employers to cut their pay for over three years and we're not about to give up now. Hospitality workers can't afford and don't deserve a sudden pay cut."

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