Pay structure a matter of trust

OPINION: The argument about penalty rates has an echo at the other end of the pay scale.

Sometimes it feels like democracy is the place that good ideas go to die. Or maybe I’m fingering the wrong culprit. Perhaps it is the government or the media that should really shoulder the blame.

When reasonable ideas like the Fair Work Commission’s proposal to bring Sunday pay rates in line with those for Saturday ends up the subject of shrill debate, I feel a bit depressed about the level of public discourse.

One of the key concerns seems to be whether businesses will actually spend the money they save on Sunday wages to employ extra staff, or just pocket it.

This seems quite an odd concern to me, because surely it doesn’t matter how a business spends the money it ‘saves’ on its Sunday wages.

What matters is these proposed changes potentially increase the pool of money a business owner has to invest in any number of ventures.

A similar argument has been mounted against any reduction to the corporate tax rate – a deep suspicion over how the extra funds will be spent by big businesses.

The retailers I have spoken to plan to take advantage of the rate cut to employ more experienced staff on Sunday, which is now their busiest trading day of the week.

The rise of weekend retail trade is a relatively recent phenomenon, with business owners reporting sharp increases in Saturday and Sunday sales over a period of less than five years.

I’m sympathetic to the weekend workers who stand to lose out from reduced rates, but many businesses were only using their youngest staff or family members to control the cost of staffing these shifts.

It’s a relief to see a courageous piece of decision-making, even if it was a government instrument and not the actual government shaping this proposal.

With wages growth languishing at 30-year lows, getting the settings right for economic growth has never been more important.

But not everyone is juggling rapid rises in the cost of living with incremental wage growth; a lucky few are still rolling in clover, at least for now.

I was recently in our nation’s capital, where I spent an evening with a group of doctors.

Amid the talk of health policy and the demands of a career in healthcare, discussion turned to what one senior surgeon referred to as ‘price gouging’ in surgical procedures.

The issue is that some doctors are charging two, three or even four times more than their colleagues for certain common procedures.

The doctors around the table told stories of patients being quoted tens of thousands of dollars for reasonably common surgery, such as hip replacements.

The trouble is these doctors are not doing anything different to any other successful business.

They’re taking advantage of their experience and reputation to increase the cost of their services.

And if there were no demand, then they wouldn’t be able to charge these very high prices.

Doctors are highly skilled professionals who spend many years studying and accruing large debts. Surely they have the right to make as much money as they can from their practice?

However, for the consumers of this service, it is not easy to shop around for the best deal on your knee or your ruptured spleen.

And if you or a family member is gravely ill, you might not have the appetite to seek a second opinion and potentially wait weeks to see another specialist in the hope of getting a better deal.

The consensus around the dinner table was that, while it’s fine to run a highly profitable business, charging patients four times the average fee for a service was unethical and eroded trust in the profession.

The solution, if indeed there is one beyond that of buyer responsibility (or buyer beware), needs to come from within the medical fraternity; and the answer is probably greater transparency across a number of measures, including fees.

League tables are anathema to the medical fraternity, which argues they will ultimately hurt the very people they set out to protect – patients with complex and chronic issues.

But surely there’s room for some small but significant shift in how much information is freely provided, because this isn’t about getting the best deal.

It’s about protecting consumers from getting tripped up by an anachronistic system, not so very unlike penalty rates, really.