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AUSTRALIAN WORKERS' UNION RESOLUTION IS SHORT-SIGHTED
Sydney, 10 February, 2005: The Australian Bankers’ Association (ABA) said the Australian Workers’ Union’s (AWU’s) statement that employees should be given priority over lenders in the event of insolvency is very short-sighted.
Banks are sympathetic to the impact on individuals and their families if they lose their job without receiving their entitlements.
However, the AWU’s policy will not be in the interests of workers.
The effect of the policy initiative will be to increase the risk profile of businesses that employ people and will mean those businesses will either face higher interest rates, less credit availability or both.
This view was supported by the Australian Manufacturing Workers’ Union (AMWU) in its evidence to a parliamentary inquiry:
“…(the maximum priority rule) will increase the degree of risk to lenders, which naturally will be passed on through higher charges. Increased risk of business lending exists, and that rates of interest on lending are thereby increased as a function of that heightened risk.”1 The Coalition Government’s GEERS2 scheme is one of the most innovative, well-targeted and best in the world.
It is not in the interests of employees that they become more costly to employ, particularly when a strong compensation scheme is already in place.
For further information:
Heather Wellard
Director, Public Relations
Phone: 02 8298 0411
Mobile: 0409 830 439
ENDS
1 Australian Manufacturing Workers’ Union submission to the Parliamentary Joint Committee on Corporations and Financial Services, Inquiry into Australia’s Insolvency Laws, 31 July 2003, pp 16-17
2 General Employee Entitlements and Redundancy Scheme | |
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