Interview - 2GB Breakfast with Ben Fordham
BEN FORDHAM, HOST: Now, we want to try and get our head around this because we’ve got tradies and builders raising the alarm – they’re worried about the Federal Government’s new plan for same job, same pay. So under the proposal subcontractors would be forced on to an employee award wages proposal, and the Fair Work Commission would have oversight and there are fears that this could send more builders over the edge. The Master Builders Association says it will bulldoze small business. And we know that 1,800 builders have already gone broke so far this year. It is a bit confusing, and I know that the consultation process is underway, so I don’t know that firm decisions have been made just yet. But Tony Burke has made himself available to us – the Minister for Employment and Workplace Relations.
Tony Burke, thanks for joining us.
TONY BURKE MP, MINISTER FOR EMPLOYMENT AND WORKPLACE RELATIONS, MINISTER FOR THE ARTS: No, thanks for having me on, Ben, to be able to clear some of this up. I appreciate it.
FORDHAM: Yeah. So what’s wrong with the old system first of all?
BURKE: Look, there’s two main thing here we’re trying to fix: one is you’ve got people in the gig economy – you know, the people who might be delivering a pizza to your home or something like that – where there’s absolutely no minimum rate for them. So you’ve got people who are working in Australia and they’re earning less than the minimum wage. And, you know, there’s plenty of people – the people you described – who are genuinely running small businesses. But someone delivering a pizza on the back of a bicycle, they want the flexibility, they like the way that, you know, the sort of flexibility of how Uber and other places work, but to have some minimum standards there. I don’t want us to become a country where you’re relying on your tips to be able to make ends meet. And so that’s what the employee-like part of it is. The other –
FORDHAM: Okay, just say I have three carpenters building the house, they’re all fully qualified, they’re doing the same job. Would they all have to be paid the same?
BURKE: No, no, no. So can I go to the second half?
BURKE: So the second half is the same job, same pay concept. Probably a better way to describe it is as closing a labour-hire loophole. At the moment if you’ve got an agreement that the employer, the workers, everyone’s voted on, they’ve all signed up to and they’ve said this is the rate of pay at this site, what that employer can then do at the moment is they say, “Okay, well, I’m just going to start employing people through labour hire, and everything we just agreed to won’t apply to them. We can undercut the rates of pay.” That’s what we’re trying to stop. That once you’ve agreed that at this site that’s the rate of pay.
It’s a pretty big issue in mining where I was at a mine in the Hunter Valley last week where workers there – it’s so bad there that the casual workers, even though you’re meant to get a casual loading, because the casuals are employed through labour-hire they’re on a lower hourly rate than the person - the permanent worker, they’re working side by side with doing the exact same job, same uniform, the whole bit.
FORDHAM: Okay, but those people who’ve been hired through labour hire, haven’t they agreed to those rates of pay?
BURKE: Well, everybody tries to get a job. But once an employer – like, it’s a loophole. It’s a loophole to have a situation where you have agreed with your workforce anyone who works on this site, this is what the rate of pay is going to be. Then you shouldn’t then be able to say, “Oh, but we’ll now use a labour-hire firm and we’ll undercut all of that because technically it’s a different person, even though they’re doing the exact same job we just agreed you’d be doing.”
FORDHAM: Sure, but it’s not unusual to have different people doing the same thing being paid differently. I mean, you see that with casuals, for example. If we have someone coming in here as a casual, then they receive other benefits that full-time employees don’t receive?
BURKE: Yeah, but this loophole – and this is the thing that the labour loophole’s doing – you get the exact opposite of what you just described whereas the casuals end up with none of the extra benefits, no extra loading, lower hourly rate. No matter which way you look at this, this is a rort. And, you know, if a rate of pay is agreed at a site, then that should be the rate of pay. It won’t affect subcontractors and things like that that you’ve just described. It’s very much a labour-hire loophole that needs to be closed.
FORDHAM: Okay. So people who are hiring people through labour-hire at a lower rate are rorting them?
BURKE: Look, I’ve used labour hire when I’ve been an employer over the years. I’ve got no problem with using labour hire. But you use it because you’ve got to get specialist staff. You’ve got to get a surge workforce You should never be using it because it’s a cheaper way out than paying your own employees.
FORDHAM: The Master Builders say this will fundamentally upend and damage the entire building industry, which is founded on a model of specialist contract work.
BURKE: The Master Builders will never agree to what we’re putting forward here, and I get that. They’ll always, you know, go right to the edge of being pretty dramatic with their language. They walked out on the previous government’s consultations as well. We have really constructive relationships with the Master Builders on a whole lot of things that government does, but when it comes to anything on workplace rights they’re pretty extreme, they’re out there. So we still involve them in the consultation. You know, there’s been 65 consultation meetings, they’ve been involved in various ones of those. But I’m not expecting we’re going to get their agreement, and they’ll make some pretty extreme claims, but what we’re doing is a lot more modest.
FORDHAM: All right. What about Robert Gottliebsen, who’s been writing about economic matters his whole life. He says the Government’s proposed powers involve declaring a contract to be employee-like and bringing that contract into the industrial relations system to be regulated by the Fair Work Commission. He’s got concerns about it as well. Is he kidding himself?
BURKE: Well, what he’s described, he’s described it as though we’re doing it across the whole economy. It’s something we’re doing within the gig economy. And I just don’t think we can be a country where you’ve got in the gig economy nearly half the workforce reporting being paid less the minimum wage. The minimum wage is meant to be the minimum someone’s paid. And to have the fact that we’ve got all these people employed through platforms now who want the flexibility – I don’t want to turn them all into employees; I just want there to be some minimum standards there.
FORDHAM: All right. I mean, you’ve got those websites and those apps where people can say, “All right, I need someone to move a heap of timber from out the back to out the front,” and you can find out who’s willing to do it and for what price, so that’s a situation where two people agree on a price, and it might be under. Is that okay or not anymore?
BURKE: Yeah, look, that’s one in the consultation where, you know, those rates of pay aren’t being set by an algorithm or anything; they’re sort of being used as a noticeboard. So in the consultation, while we haven’t landed, that’s the sort of thing we’re less likely to be regulating.
FORDHAM: And just to be clear, on subcontractors for building sites you’re saying there are no significant changes?
BURKE: No. Same job, same pay, you know, it’s a labour hire loophole we’re closing, and the gig economy doesn’t affect them. You know, you don’t go to Uber sparkies or anything like that.
FORDHAM: All right. I’m guessing that there will be some businesses and some builders who will go, “All right, well, we’re not going to be able to afford what we wanted to afford because Tony Burke is charging us more.”
BURKE: Well, here’s the thing – if you’re using the loophole at the moment to undercut wages, then there would be an increase to your wages bill, and I make no apology for that. If someone’s using the loophole and we’re closing it, then they’ve got a – they’ll be paying the rates of pay. But they’ll only be paying the rates of pay that they’ve already agreed with their workforce are fair. Like, it doesn’t go higher than that. If they’ve already agreed with their workforce this is the fair rate of pay, then that’s a fair rate of pay. They just don’t get a loophole to then undercut what they’ve agreed to.
FORDHAM: And we should be clear – when we use the word “loophole”, what they’re doing currently is fine under the current system.
BURKE: Oh, yeah – every loophole’s legal until it’s closed, that’s right.
FORDHAM: And just on the gig economy, we’ve been reading ads for Uber for some time now and they’ve been saying, “Look, we know that you’re looking at these gig economy reforms. Can we please have a seat at the table so you can hear from our Uber drivers about how much they value flexibility?” Are you going to be meeting directly with Uber?
BURKE: I have and the department has. And I’ve got to say, on that point that you make there about trying to ensure that the flexibility that people who use the app stays, that’s really important, and I think they’re right on that. That’s why – some countries in the world have tried to turn everybody into an employee. You talk to the people who are working on the platforms, most of them want the flexibility. They just also want to make sure that they’re getting enough money to make ends meet, and there’s some minimum standards there. But they wouldn’t be the full range of minimum standards that an employee gets.
FORDHAM: Tony Burke, the Minister, is with us. Just a quick one before you go: I want to have a look at JobSeeker. We’ve been talking about this recently. There are 1.1 million people on JobSeeker and youth allowance. And we’ve spoken about Work for the Dole and whether Work for the Dole should be beefed up or expanded in some ways. So do you know how many people are choosing to work for the dole at the moment out of those 1.1 million?
BURKE: I don’t have the figure at my fingertips, but it’s a small number that are actually at that part of the program at the moment because a new system started on the 1st of July that had been set up by the previous government. So it will take a few months.
FORDHAM: Out of the 1.1 million, it’s under 4,000 that are working for the dole. Would you support a strengthening of Work for the Dole so we can get more people out there and learning the benefits of contributing?
BURKE: Yeah, look, I can’t make it as a policy announcement now, but the thing that I’m looking at is how we can better use wage subsidies. One of my concerns with Work for the Dole is at the end of it you’ve got no prospect of a job because of the way it’s currently structured. And I’m interested to see as to whether there’s ways we can provide wage subsidies so that where you go to is somewhere where it’s a real employer who, if they want to keep you on, there’s actually a prospect of that happening. So that’s what I’m trying to work out. And a lot of employers used to be wary of using wage subsidies, but since JobKeeper, businesses are a lot more familiar with how a wage subsidy works. So I’m working through at the moment with the department – so you’re the first to get this - but working through as to whether instead of the exact way we’ve done Work for the Dole in the past whether there’s a way of doing it that has a better chance of leading to permanent work for people.
FORDHAM: Yeah, well, that’s a good thing. If we can get people from welfare to work everyone wins. Thanks for your time.
BURKE: Great to talk. See you.
FORDHAM: Tony Burke, the Minister for Employment and Workplace Relations.