PATRICIA KARVELAS, HOST: Tony Burke is the Employment Minister and our guest this morning. Tony Burke, welcome.
THE HON TONY BURKE MP, MINISTER FOR EMPLOYMENT AND WORKPLACE RELATIONS, MINISTER FOR THE ARTS: G'day Patricia.
KARVELAS: 3.7 per cent wage growth is the best it's been in years, but almost half the inflation rate, actually. So is it cause for celebration?
BURKE: We certainly want to see the point get as inflation comes down, for wages to get in front of inflation again, you know, real wages is the combination of the two things, and for 10 years there was a deliberate attempt – and a successful attempt – to keep wages low, and what we have now is we have a series of different factors that are impacting on inflation.
We've got to do what we can to get inflation down, but at the same time we've got to make sure that we're taking action to get wages moving. And the different things that the Government's done since coming to office in backing the Annual Wage Review, in backing the aged care wage increase, and in changing the law for secure jobs, better pay, those impacts are starting to be seen, and that's a good thing, that wages are now moving.
KARVELAS: The Fair Work Commission President yesterday questioned whether lifting the minimum wage by 7 per cent might prompt the RBA to lift rates again. What's your response to that?
BURKE: The President of the Commission is doing exactly what you'd expect the President of the Commission to do, and that's to interrogate all the arguments, and to interrogate them from every angle. That's exactly what President Hatcher's role is in the Annual Wage Review, it's what he's doing. I know a lot's been read into it, but the reality is we know we don't have some sort of wage-price spiral; you know, wages, this is a good outcome for wages at 3.7, but at the same time we're talking about an inflation rate at 7 per cent. There is no way in the world that inflation's being driven by incredible high wage growth, because we simply haven't had that.
We're getting closer to people being able to get what should have been sustainable wage increases for years, but they had been deliberately suppressed by the previous government.
KARVELAS: So does the Government position on wages mean you back in this 7 per cent rise for the lowest paid?
BURKE: For the lowest paid, in our submission, we've said that people shouldn't go backwards.
KARVELAS: So 7 per cent for them?
BURKE: Well, yeah, we don't put a number on it, but you know, we'll see what inflation is at the time of the Annual Wage Review decision; there will be more data to come in by then. But the principle is that people should not be going backwards.
And you think about it, the higher your wage level is, you know, we still want over time for people to get back into real wage increases, but you've got more tolerance and more flexibility if you're on a higher income.
If you're on the minimum wage, if you're one of the lowest wage earners in Australia, then are we really going to say that it's their fault that there's pressure on inflation, and the only way that they're going to have to make cuts is to buy less food? Some of the people who are arguing, "We've got to suppress wages now because inflation's high", it's the same people who were arguing that we previously had to suppress wages because inflation was low.
Some people will always find an argument as to why now's just not the right time to get wages moving, and people have been punished for that for a long time.
KARVELAS: Tony Burke, how do you define the lowest paid? Is it in the hundreds or thousands?
BURKE: There's a bit over, like the numbers bounce around, but you know, in the order of 200,000, and it can go up a little bit more, who are on the actual minimum wage.
What the Fair Work Commission did last time was to provide the full increase for people on the minimum wage and then a lower percentage as you worked your way through the award system.
There's a lot of people on the award system who are at the lower end of awards that are closer to the minimum wage. There are some people, for example, pilots are within the award system. There are some people on significantly higher wages. And the Commission's got a way of being able to work that through.
KARVELAS: Is there a risk that a big rise will lead the RBA to hike up rates again as the Fair Work Commission speculated yesterday?
BURKE: I find it hard to see that that impact would come from making sure that people on the minimum wage don't go backwards. On last year's figures, for people on the minimum wage, should just be able to keep up; it was in the order of a dollar, a dollar an hour. This is not extraordinary amounts of money that we're talking for those people, and certainly it would be a real stretch to say that number of people on those sorts of modest wages are somehow the cause of inflation.
KARVELAS: I'm reading a direct quote from the Fair Work Commission's President Adam Hatcher yesterday, where he says, "Reading the tea leaves, the Reserve Bank seems to be telling us that the increase should be the top of the inflation target band, 3 per cent, plus long run productivity growth of about 1 per cent. That comes to about 4." Doesn't that demonstrate that the Fair Work Commission does read the Reserve Bank's warnings as "watch it, because inflation will get worse”?
BURKE: If I put it in these terms, that would be why last time the Fair Work Commission came out with a different outcome for people on the lowest pay to what it did as you went up the award system. And that's the balance that they're equipped to do, we've appointed people who are now on the panel making that decision. But that's the overarching economic case that they've got to work out, and they're well equipped to do that.
But the starting principle from the Government is that the people on the lowest wages, people on the minimum wage, you just we should not have a situation where they're going backwards. I mean where are they meant to make cuts?
KARVELAS: The minutes from the RBA's latest board meeting suggest at least two more interest rate rises are on the cards. Do you believe there's justification for that?
BURKE: I don't question the independence of the Reserve Bank.
KARVELAS: How's that going to hurt people though, workers that you advocate for?
BURKE: We want to get, we want to put down the pressure on inflation, we want to make sure that we help people with cost of living. We want to make sure that the lines cross as inflation comes down and wages get in front of that.
Had we not taken the action we've taken on wages, that day would be a very, very long way off. Because we've taken the action we've taken on wages, we're getting wages back to a more reasonable level of increase, and as we keep the pressure to get prices down, which we've been doing, with childcare prices, with prices around energy, with the prices around medicines, the downward pressure that we're putting on all of those, will have an impact on inflation as well.
So you can't control every price. Some of it is overseas, some of it is because of chronic problems with supply chains and supply chain pressures. There's some things you can act on quickly, there's some things that are international pressures, but one thing that you can do is to make sure that we get wages moving. We've been doing that, and where there are price pressures that we're going to have a positive impact on for people, we've been doing that too.
KARVELAS: Given the Fair Work Commission, as you say, has made it fairly clear that it is very live to the issues being raised by the RBA and its inflation target, should workers temper their expectations of what kind of rise they'll get?
BURKE: Well, once again, just with all the different issues that are a pressure on inflation, I do find it hard that so much of the public debate keeps coming back and blaming workers for it. I'm not blaming you for asking the question. You've put a question, it's out there publicly. But there’s an argument that so often gets put there that nothing is that we don't need to take account as to whether prices could be reined back in other ways, we don't take into account anything, and all the blame goes to working people. I just don't accept that analysis.
It is the case that there can be such a thing as a wage-price spiral, but we don't have one in Australia. And we're nowhere near one in Australia.
KARVELAS: Well, isn't there a risk? We don't have one yet, sure, but isn't that the risk?
BURKE: No, but you'll also find quotes from the Reserve Bank saying that they're not concerned about there being a wage-price spiral at the moment, that the numbers that are coming through are not of that order, and not in that range. So there's been some attempt by some people to do it, but you know-- when you had Peter Dutton on your program the other day, he couldn't even argue for the lowest paid that they should be in a position where they don't go backwards, and I just find it extraordinary that we can't say for people on the lowest wages, let's at least make sure they can keep up with what's happening with prices, and let's still take all the other actions we need to take to put downward pressure on inflation.
KARVELAS: Tony Burke, I want to move to your other portfolio. The Federal Government is jointly funding an investigation with the South Australian and Northern Territory Governments into the APY Art Centre Collective over allegations that are being published in The Australian newspaper of interference by non Indigenous staffers. Why have you done that?
BURKE: Okay. There are two competing principles, and it will take me a moment just to explain that, if you can bear with me.
The first principle is that we can't create a situation where we pretend that an artist can't have assistance. Some of the commentary that's been around has been to say that somehow if a First Nations artist has assistance in some way, that it's no longer their work. We don't apply that rule to artists anywhere in Australia or anywhere in history. Michelangelo had assistance in painting The Sistine Chapel. No one said it wasn't his work.
KARVELAS: It's indeed a standard part of that art practice, right?
BURKE: Yeah, that's right, completely understand
KARVELAS: Is there a different scrutiny that's been put on Indigenous art?
BURKE: So, well, there has been, but there is a second principle that is also important, and this is the complexity that we're wanting to work through. The second principle is it's called "Tjukurrpa", but the concept is there are some Dreaming stories that only First Nations artists have the right to depict. So the preparation of the canvass can be, might be done by assistance. A work once completed, people who are not First Nations might be involved in replicating it, if it's to be printed or reproduced on a bigger scale or something like that, but a First Nations principle that unless you have cultural authority you should not be involved in the actual depicting of that Dreaming story.
Now that's not a restriction on the artist, it's not a restriction on the First Nations artist, it's a restriction on where somebody is able, without cultural authority, to be involved.
So those two principles effectively have blurred in some of the commentary, and we need to have a situation where we're able to basically test the facts in terms of as to what has actually happened and provide a safe space where people will feel they can talk freely while we work this out. It has to be led by the South Australian Government, because they're the organisation that provides recurrent funding to the centre. But I want to make sure throughout all of this we don't start to blur the lines and put rules on First Nations artists and restrictions on them that we would apply to no other artist; I think that's really important.
BURKE: But we also need to make sure that we're being true to some of the important cultural principles that First Nations communities are wanting us to be true to.
KARVELAS: Just very briefly, what sort of message does it send to Australia in the Asia Pacific region that US President Joe Biden won't be attending the Quad Summit in Sydney, but he still is going to be able to travel, but just not for us. Is that something we should concerned about?
BURKE: No, no, no. I don't think anyone would question when you've got something like the debt ceiling being negotiated in the United States, that President Biden has taken the position
KARVELAS: But haven't we been snubbed?
BURKE: No. President Biden's indicated that he's disappointed he's not able to be here. I'm certainly hopeful that we're able to get him back for a different visit at a later point in time. All the leaders of the Quad will still be on Saturday and Sunday in the same place, in Japan, and the meeting will happen there, and the Prime Minister, Anthony Albanese's going to be making his trip to Washington's now going to be a State visit. So, in terms of the relationship between the countries and the courtesy and the strength of the relationship as allies, that's all there, and I think anyone who knows what negotiations with the debt ceiling are like in the United States understands exactly why President's Biden's been in a situation to make a decision like this.
KARVELAS: Thanks so much for your time.
BURKE: Great to talk. See you.
KARVELAS: Employment and Workplace Relations Minister, Tony Burke, and you're listening to RN Breakfast.