Billions of dollars worth of unpaid wages could be returned to Australian workers as the federal government attempts to crack down on exploitative labour loopholes.

When asked if workers would receive a staggering $9 billion in extra wages over 10 years, Workplace Relations Minister Tony Burke did not deny the sum and said it was an “extraordinary amount” for people to be underpaid.

But he noted it was a tiny percentage of the total wages paid by Australian employers and challenged the notion it would translate into a massive surge in consumer prices.

“That figure, when you look at it as a percentage of Australia’s wages, is one tenth of one per cent of what wages are in Australia,” he told reporters in Canberra on Tuesday.

The changes to workplace laws, introduced to parliament on Monday, are aimed at closing loopholes, including the use of labour hire workers to undercut the rate of pay agreed for employees.

The reforms also seek to criminalise wage theft, bolster protections for gig workers and create a pathway for casuals to become permanent.

The proposed changes have unleashed a wave of criticism from the coalition and employer groups, with concerns the legislation will push up the cost of deliveries and other services for consumers, weigh on productivity growth and trigger job losses.

Opposition workplace relations spokeswoman Michaelia Cash said the coalition wanted higher wages for Australians.

“But that cannot be at the expense of businesses, it cannot be at the expense of passing on higher costs to consumers,” she said.

Senator Cash called on Mr Burke to allow public hearings for feedback on the proposed changes, saying the government did not need to ram the legislation through.

“Let’s work through the complexity, let’s work through the cost, let’s work through the confusion,” she said.

The coalition failed in a bid to refer the bill to an inquiry which would report in February.

Business groups, which have been campaigning against the changes for several months, are wary of the scope of the reforms.

Master Builders Australia challenged the notion the reforms would have a minimal impact.

“There is nothing simple about adding hundreds of pages to the Fair Work Act and expecting businesses of all sizes and independent contractors to try and navigate it,” chief executive Denita Wawn said.

Minerals Council of Australia CEO Tania Constable decried the bill as “an act of national self-harm” and claimed it would not increase competition or innovation and bring down inflation.

“It has nothing to do with closing any loophole,” she said.

“Instead, it could catch every business in Australia that employs staff.

“It’s not about increasing wages. It will increase the cost of everything for everyone. It’s the bill that poor Australians will have to pay.”

Greens leader Adam Bandt said his party wanted more money going into workers’ pockets, but is yet to say whether it will support the legislation.

The government will need support from the Greens and crossbenchers to pass the laws.

Poppy Johnston and Kat Wong
(Australian Associated Press)