Interview – Afternoon Briefing ABC News with Greg Jennett

GREG JENNETT, HOST: Employment and Workplace Relations Minister Tony Burke was at the same Cabinet meeting with the Prime Minister when the Fair Work decision came down. He joined us from Gladstone a little earlier. This was around the time that we learnt that the energy market was in fact being suspended, so we started out with a discussion on that.

[Excerpt]

Tony Burke, welcome back to Afternoon Briefing. Before we get to the real issue of the day for you as Workplace Relations Minister, can I start with the breaking news story of the afternoon? The suspension of the national electricity wholesale market. This sounds like complete and utter market failure now. How are we going to navigate our way out of this energy crisis? And was the government aware that it was coming?

THE HON TONY BURKE MP, MINISTER FOR EMPLOYMENT AND WORKPLACE RELATIONS, MINISTER FOR THE ARTS: I'll have to ask you to refer the detail of that to Chris Bowen. But the thing that I can say, Greg, is all of this is evidence of what happens when there's a decade of neglect on actually dealing with energy policy. We've had this long period where the politics mattered, the climate wars mattered, trying to wedge political opponents mattered to the Liberal and National parties, but they weren't doing the job. And so there's a huge amount of work to now be done after that neglect and that's what we were onto. But I think that's what we're seeing in so many ways now.

JENNETT: Alright. I won't press you any further because it is technical stuff and I know that the relevant authorities will be speaking on it. Why don't we move though to today's national wage case, 5.2 per cent for many, 4.6 per cent for others. How many workers are affected and what difference will this make to their lives?

BURKE: Look, for the highest amount of increase, that's for the people on the minimum wage, there's 184,000 people there and they get the full 5.2 per cent increase. For the awards up beyond that, everybody gets, if you're working full time, at least the full $40 a week, and as that starts to move up through the award system, it becomes the 4.6 per cent at the higher levels. What does that effectively mean? It's for all the arguments during the election campaign that the sky would fall in after Anthony Albanese, before he was Prime Minister, said absolutely in answer to that question about whether people should be at least getting 5.1 per cent. It means now the Fair Work Commission has agreed. People shouldn't be going backwards and especially the people on the lowest wages can't afford to go backwards. Today's decision is effectively step one in ending nearly a decade of a deliberate policy of low wages.

JENNETT: Yeah, I'll ask you about some other subsequent steps that your Government and yourself may be examining. Can I ask you, though, whether it's your analysis or whether you accept, as a matter of principle, that the lowest paid spend their wage or most of it, they don't save much?

BURKE: That's absolutely true. And you need to remember that inflation rate has actually been higher on the expenses that are not discretionary. So the people at the lower income, not only are they not in a position to save, not only do they not have savings to draw on, but they've been hit with the full thrust of the worst of inflation.

JENNETT: Right. That being the case then, now with this extra amount of money in their accounts each and every week, how will that not stoke inflation? It's going to be spent. That's more money chasing, roughly speaking, the same amount of goods. Why is that not going to be wage-led inflation?

BURKE: Yeah. The Governor of the Reserve Bank and the Secretary of Treasury, on a number of occasions, have said the same thing, which is as long as wages don't go beyond inflation plus productivity, you don't have an inflationary effect.

JENNETT: Okay. So you're saying they will remain behind at all times. Today is only something of a catch-up and yet further inflation is still coming down the pipe. Is it?

BURKE: Well, the annual wage review deals with the data we already have. It's not able to deal with speculation of what might come next. But what they had in front of them was a headline inflation rate of 5.1 per cent. And what they've made a decision on is to say that workers, particularly those on the lowest wages, shouldn’t be going backwards. I just want to remind you and remind the viewers that we were told during the time of low inflation that we couldn't have wage rises because inflation was low. Now we'll have some people argue you can't have wage rises because inflation is high. There will always be some people saying wages can't keep pace, that all the share of productivity should go to profit rather than to wages. And the government effectively - the previous government - if you think of the wages matrix, like being a mixing board at the back of a gig, you've got all these dials and all these levers, they had them all set down to zero. What we've done is we've moved one of them, and the Fair Work Commission today have agreed with that. Today's just the first step in ending the era of low wage growth.

JENNETT: Alright. Look, on the tourism, aviation, and hospitality sectors -restaurants in effect - they're experiencing what the Commission decided was a lagging recovery. They're also short on staff. So what are we to conclude about employer affordability in that sector? Do you agree? Do you support the deferral until October of their pay rises?

BURKE: I respect the decision of the Commission. So that part of it is not something that we asked them to do. It wasn't in our submission, but we always understood they might delay some of the increases. We respect the decision for them doing that. The truth is in hospitality, because of labour shortage, in some parts of the country, people are already paying well above what the minimum rates are simply because they can't get workers. So the impact of that will be patchy.

JENNETT: Are you certain that the aviation sector, and I suppose, by association, parts of the tourism sector then, are engaged in a lagging recovery? It doesn't look like that around certain airports on recent weekends.

BURKE: Yeah. As I say, that's something that the Commission has determined. We respect their decision. It's not an aspect of the decision we were asking for.

JENNETT: Alright, now you've spoken about step one. Can I take you to step two, which is a more fundamental look at what ails ongoing wage increases in this country, the modern award system? When and where will you be taking steps two, three, four and subsequent to address those underlying problems or what employers and unions seem to agree are an underlying problem?

BURKE: So step two is to start closing the loopholes. There's a few areas where loopholes have appeared over the course of the last decade, and the government- previous government never shut them down. So one of those, for example, is labour hire in some industries not being used for a surge workforce-

JENNETT: Okay. So that's where we're going to interrupt Tony Burke or our earlier discussion with him.

[ENDS]