Interview - ABC 7.30

DAVID SPEERS, HOST: Tony Burke is the Minister for Employment and Workplace Relations. I spoke to him earlier in our Canberra studio. Minister, welcome to the program.

THE HON TONY BURKE MP, MINISTER FOR EMPLOYMENT AND WORKPLACE RELATIONS: Hi, David.

SPEERS: You've repeatedly said this legislation will get wages moving. I'm just wondering to what extent. How much will wages rise as a result of these changes?

BURKE: Well, history has said, as long as you have bargains in place, as long as you have enterprise agreements, you're always doing better than if people are on awards.

I think for the multi-employer end, the best example is to look at where it was tried, even with the logistical difficulties that are currently there. So, if you look at the Victorian childcare centres that engaged in multi-employer bargaining together – and it was complex because the system wasn't really set up for it, but they ended up with wage increases between 12 and 16 per cent for those workers. This is a section of the workforce which generally hasn't done well out of bargaining.

And if you look at it from the perspective of the employers as well, most of the people who run childcare centres are early childhood educators themselves. They're not trained, usually, in industrial relations. So the only way they'll get the sorts of benefits that can come in productivity, from a business perspective, with enterprise agreements is if they're able to work together to basically have a consultant who knows the rules to be able to bargain on their behalf. But 12 per cent is the best example we have. It will be different in every industry. I'm not pretending to know the outcome of every bargain, but that's what child care... 

SPEERS: So child care workers could expect 12 to 16 per cent pay rises as a result of this change?

BURKE: No. I have given you an example where that's what it was. And in every enterprise agreement – and it will be similar with multi-employer bargains – you get different circumstances in different agreements. But the best indication...

SPEERS: What about some other sectors?

BURKE: Well, certainly for everybody, every agreement ends up landing you above the award. So, at a time where we need to get wages moving, we’ve already pulled the first lever. The first lever was the annual wage review. And that was a way to get awards moving and the minimum rate of pay moving. That has already happened. The next stage is to get bargaining and agreements moving.

SPEERS: I'm wondering what's responsible, because as you know, the Reserve Bank has been expressing some concern about wage growth just yesterday. It didn't want anything that will put more pressure on inflation. What level of wage growth is responsible?

BURKE: Well, I think you can only repeat what was there from the Governor of the Reserve Bank himself, which is when you do the average across the whole of the economy. He said the anchor point. So, it's not a cap, but the anchor point over time should be roughly 3 and a half percent. And that's based on the Reserve Bank wanting to keep the CPI between 2 and 3 per cent and then presuming one per cent of productivity. So, you go from two and a half, you add one per cent of productivity, you get three and a half. That's where that anchor point comes from. And so not everybody's going to get on an enterprise agreement. Not everybody is going to get on a multi-employer agreement. 

But the history for a long time in Australia is, we've been told wages are about to go up. We were even told that when unemployment comes down, that'll create the hydraulic pressure that'll just push wages up. We've now had prolonged period of low unemployment, and that hydraulic pressure isn't pushing anything up because there's leaks all through the pipes for the bargaining system that's not working well.

SPEERS: But even in the Government's budget last week, it's clear we won't see real wage growth any time soon, another 18 months or so. But let me come to this contentious element of your bill. The multi-employer bargaining that you mentioned there allowing unions to negotiate across multiple employers. You've been talking a lot about helping childcare workers and particularly women in low paid sectors, but what about other sectors? Will this apply right across the economy?

BURKE: Well, certainly any part of the economy that already has strong enterprise agreements. If you're in an enterprise agreement already, you're not eligible for a multi-employer agreement. The multi-employer agreements, the way the legislation has been drafted, are for the people who are not already covered. So, if you look at the areas that some of the fear campaign has been about, it's often been about areas that are considered historically more militant, more industrially strong. They're the places that already have enterprise agreements in place.

SPEERS: Are you saying, in mining, ports, construction?

BURKE: Well, certainly construction. We've got a specific section there that means it won't be happening in the areas covered by construction. With respect to mining, again, you've got examples. It's pretty hard. Like you go mine by mine, you've got enterprise agreements already in place in most of them. So legally, is it possible that you could have a mind somewhere where this was pursued it wouldn't be unlawful, but it's not really realistic. If you look at the success with agreement making that's already - 

SPEERS: Why don't you clarify that? Because there is concern – would it still be possible?

BURKE: Well, possible if they're not on enterprise agreements, but they are. And possible if you could pass a public interest test, and for various sectors it would be harder to pass a public interest test. So, I think you can sort of navigate... if they've had to navigate this far to find a fear campaign of examples that are really impractical, then I think it's evidence that where we want to target this legislation is exactly where it has landed.

SPEERS: You did say in the speech when you introduced the bill that you wanted to ensure businesses that are competing on quality innovation and on product and service offerings, rather than wages and conditions, are able to continue to do so. What does that mean? Should some sectors be exempt?

BURKE: Well, the simple example was to contrast with areas where it's a race to the bottom on wages, so this decision would be made by the Commission when they're applying both the common interests and the public interest tests. So, it's for the Commission, but in the second reading speech, I tried to make sure there was some guidance there. So, it wasn't just the examples you said, where people should be allowed to continue, but I then gave the example of where we would want multi-employer bargaining to be able to step in, and that was where you have a race to the bottom on wages. If you're trying to get wages moving, that's not the sort of competition that the economy needs.

SPEERS: Finally, given the concerns of crossbenchers who are worried there's not enough time for them to properly scrutinise this, are you open to splitting the bill and getting what you can through this year, or is it an all-or-nothing approach you're taking?

BURKE: My focus right now is to work with the crossbench, to try to work out, to make sure that I'm providing all the material I possibly can for the areas where they're wanting more detail. My department has been doing that. I've been personally involved in some meetings on that today. Secondly, where there are areas where tweaking the legislation in different ways would make a real difference for them, we're having those discussions and making sure we're open to this. If I can get it through this year, it means we can get wages moving faster. People have had ten years where wages were deliberately held back. If I can move that forward as quickly as I can so that we break through and get wages moving earlier, that's what I want to achieve.

SPEERS: Tony Burke, thank you for joining us.

BURKE: Great to talk.

ENDS