Corporate Culture: SPC Pressured to Slash Pay by 40%

The Abbott government pressed SPC Ardmona to slash pay for workers by as much as 40 per cent under a radical bailout plan for the food processor.

Three union officials told Fairfax Media they had meetings with SPC Ardmona managing director Peter Kelly before Christmas in which Mr Kelly said he was being pressured by the Abbott government to put workers on the award if the company wanted a $25 million subsidy.

Moving workers on to the award would have dramatically cut living standards for hundreds of people at the Shepparton plant, with pay cuts of $20,000 to $30,000 a year for many. Other sources involved in the restructure have separately confirmed to Fairfax Media the Abbott government's pay push at SPC Ardmona. Industry Minister Ian Macfarlane refused to directly answer questions on the issue.

The government has been pushing struggling companies such as Toyota and SPC Ardmona to overhaul their workplace agreements as it has repeatedly warned about high wages, which has become a key political issue. That is despite the wage price index growing at just 2.6 per cent last year, the slowest growth in the 16-year history of the series.

Treasurer Joe Hockey said costs were too high. ''We do have a high Australian dollar. We've got to reduce our costs of making things in Australia,'' he said.

ACTU secretary Dave Oliver said Australia was in a ''job security crisis'' with thousands of jobs lost and wages growth slowing. ''Meanwhile, under the banner of a so-called 'wages blowout', the Abbott government has blamed every economic fallout on workers.