Interview – Radio National with Patricia Karvelas

PATRICIA KARVELAS: Labor made higher wages a central part of its successful election pitch to voters. And in its submission to the Fair Work Commission, the Government argued minimum wage workers should get a pay rise of 5.1 per cent in line with inflation. But there's a catch: Labor's not suggesting that increase go to people on higher awards. Tony Burke is the Minister for Employment, Workplace Relations, and the Arts and our guest this morning. Minister, welcome.

THE HON TONY BURKE MP: Good to be back on the program.

KARVELAS: During the election campaign, you said that anything less than a 5.1 per cent pay rise amounts to a pay cut, in real terms, because of inflation. But you're only backing that for people on the minimum wage. Why does everyone else deserve a pay cut?

BURKE: That's not what the submission says. So what the submission says, and I'll just quote what- just a quick thing from [inaudible] the new government does not want to see Australian workers go backwards. So as a general principle, we're not wanting to see people go backwards. But then we've specifically focussed the submission on the impact on low-paid workers. And the reason for that is simple. If you look at where the inflation rate is coming through, it's at its worst in non-discretionary spending. So that means the less you have, the worse you're having to deal with the cost of living crisis. And these are people who, you know, not only are they finding the cost of living crisis the worst, they're the people least likely to have savings to be able to draw down on. And they're also the people who- you know, both sides of politics not long ago were praising the heroes of the pandemic for getting us through, you know, people who weren't able to do their jobs from a laptop. And it was all agreed that we should say thank you to them, but we ended up with a political division as to whether they should have a pay rise that at least lets them keep up with cost of living.

KARVELAS: So your argument is that the minimum wage workers should be the priority, if you like, but all workers shouldn't go backwards. You argue there's little evidence that higher wages are having an inflationary effect. So why not recommend the kind of increase across the board, not just a broad statement that you just referred to, but something very specific?

BURKE: Yeah, generally, governments- governments generally don't- sorry. Let's put it this way. You don't start as a rule with putting a fixed number on things in the submissions as a rule. But the cost of living crisis is so acute for people on lower wages, that that's why we felt the need to put in that straight principle that those workers should not be going backwards. That's the reason.

KARVELAS: So is that a one-off then? Do you see this as a one-off? That it's an exception that you've gone for this 5.1 per cent?

BURKE: You make your decision on every submission based on the economic data that's in front of you and based on how people are doing. So, you know, no decisions made on where economic conditions will be in 12 months' time or what the submission would say then. It'll be responsible. It'll be dealing with what's in front of us. But right now, I've got to say, I'm quite astonished that it's even controversial to say people shouldn't be going backwards. You know, I was stunned when that became a big issue during the election campaign because, you know, it should be obvious that you don't want people to go backwards. And we know that inflation is not being driven by high wage growth. How do we know that? We don't have high wage growth. So we know that that's not a driver of inflation at the moment. And to end up with a situation where this became one of the defining issues of the campaign, it was not surprising that Labor would say people shouldn't go backwards. I was a bit stunned that we had a previous government that for a decade had low wages as a deliberate policy.

KARVELAS: Tony Burke, the Fair Work Commission can pass the 5.1 per cent increase to the minimum wage onto other awards. Would you support that decision?

BURKE: Yeah, it's very much- we've been silent on that. It's up to the Commission to work out how to do that. They've got a few different-

KARVELAS: [Interrupts] But if you don't want workers to go backwards.

BURKE: That's right. They've got a few different ways that they can do that. They can do it in terms of a percentage increase. They can do it in terms of a flat dollar increase. They can stagger it in different times. There are different ways that the Fair Work Commission is able to do that. Generally, in previous years, they've just done the flat increase. But in the discussions that have been happening back and forth in the public hearings so far, one of the things they've been contemplating would be a flat dollar increase that went across. So you ended up with a bigger proportionate benefit at lower rates of pay than you did it higher. But our submission's silent, and it's for the Fair Work Commission to look at the evidence and work out what the best way of passing things through is.

KARVELAS: One of the top priorities in government, your government, will be another attempt at finding a new accord between employers and unions. What will be your measure of success?

BURKE: Look, one of the things that we really want to get moving is productivity again. We really- now, productivity is not something that you can turn on overnight. And it's been a slow decline. Some of the problems that we have with productivity at the moment are the lack of an energy policy for so long. Similarly, the skills shortages, not only have they been drains on productivity failing to train enough people, but it's also contributed to the inflationary growth that we've got at the moment in ways that wages haven't. So those sorts of issues I think will be front and centre in the discussions at the summit. And as I suspect, there'll be different industrial relations issues being raised as well.

KARVELAS: So do you think that industrial relations reform should be delivered by your government in the first term?

BURKE: Oh, there's a whole lot that we've already committed to in advance of the wages summit, I mean, for the jobs summit…

KARVELAS: [Interrupts] But I mean, beyond that, that comes out of the job summit.

BURKE: Oh, absolutely, because one of the things that I do want to work through at the summit is; how can we get enterprise bargaining moving again? That has been a driver of wage growth. It has been a driver of productivity when it's used well as well. So that's one of the things that the Prime Minister flagged during the campaign that he wanted to see in the summit. And if we can get some outcomes that get enterprise bargaining moving again, then I think that's in everyone's interests.

KARVELAS: One thing both business and households are crying out for, of course, is relief from high energy prices. Do you think that more support is warranted, especially for people on low incomes with bills going through the roof?

BURKE: Look, the- what we've just been talking about is part of the response in terms of what's happening with prices across the board, and that includes energy prices. We're not ruling anything in or out, effectively, at the moment. Chris Bowen's scheduled a meeting with the energy market operator, the regulator, and the different state ministers, and we're working that through. It's been a decade of no energy policy that has effectively led us to a situation where we've ended up with this perfect storm. Some of the issues are international, but our capacity to be able to deal with those international issues is very much domestic. So there won't be a quick kneejerk response. But we're not in the rule in, rule out stage at the moment.

KARVELAS: But if we're waiting until your October budget for any relief, particularly for people struggling with bill shock, that's some time away. Do you think Government handouts to people struggling with the cost of energy is warranted, and perhaps even sooner?

BURKE: Look, there was- there were payments that were bipartisan that came down in the last budget that we supported. And we're not putting anything more than that on the table at the moment.

KARVELAS: But you're saying you're not ruling it out either. You're assessing whether it might be necessary?

BURKE: Oh, we're working through everything with respect to what's happening with this perfect storm of energy prices at the moment. People are- you know, and the response to the wages review is part of that as well.

KARVELAS: You're also the Minister for the Arts, a sector that's had a really tough couple of years. What are your plans for the arts sector? Obviously, it's been elevated in the department again. What signals are you sending now about what you'll do?

BURKE: I think a lot of the mistakes that were made, in terms of arts workers during the pandemic, came from the fact that when the change of government happened way back in 2013, the government abolished our cultural policy and replaced it not with a Liberal Party-National Party cultural policy, just replaced it with nothing. So you had no guidance there in the public service or across government as to how you deal and help with these workers. And it ended up during the pandemic, where there is a pretty clear view, from the Prime Minister down, that this wasn't a real industry, these weren't real workers. It was sort of being seen often through the view of a hobby or an indulgence. I want to get cultural policy back on track, and the consultation on doing that- we're using the old cultural policy, Creative Australia, that had been launched by Julia Gillard and Simon Crean. That's the basis that we're using, and the consultation on that will be starting in a couple of weeks. You know, we are serious about this, and I think aligning the arts portfolio with the industrial relations portfolio puts us in a really clear position to make clear; yes, you're absolutely respected for the cultural dividend you provide to the country, but you're also workers and deserve to be respected for that as well. I was astonished yesterday when I saw the list come out from the Opposition that they hadn't even allocated the arts portfolio to anyone. Yeah, I won't have a situation [Indistinct]

KARVELAS: [Talks over] It was fixed pretty quickly though, wasn't it? There was a note that went out?

BURKE: Yes, yes, yes, I think the fact that they did it initially, it says a fair bit. That you're able- having had so much heat over the last couple of years over the fact that they took the name out of the department, they then didn't think to check whether they'd included it in the ministry. Yeah, I think there's something to be said there. Anyway, what I want is really simple. I want the culture wars to be over, and I want cultural policy to kick off again.

KARVELAS: You're also leader of the House. How will this new, much larger crossbench change the way you operate the Parliament? Are you going to bring the sort of independents and the Greens in, even though you don't need them and you've got a majority?

BURKE: Oh, they have to be respected for the sizeable numbers that they have in the Parliament now, have to be respected for that. And that'll come out a few different ways in terms of speaking lists and prioritisation, of making sure that people are on speaking lists. On Question Time, for example, at the moment you've got a formal thing in the Standing Orders that there's one crossbench question. Well, when they're occupying roughly a quarter of the opposition benches in- are now crossbench members, then you can't just have one question in Question Time. So we're going to- I'm working through the maths that drives that. What changes will have to have with Standing Orders. I'm calling in from Canberra now. I came in last night and I'll be meeting with the clerks this week to start to work through how we turn some of those principles into standing orders. And obviously I'll be meeting directly with the crossbench. And-

KARVELAS: Have you spoken to any of them, and given them any assurances about what you'll be doing?

BURKE: Yeah, I have. I've been talking individually- initially to the ones who are in the Parliament last time, but I have spoken personally to - and made sure that they've got my number as well - to each of the new ones as they've been elected. And I'll be catching up with some of them personally as well.

KARVELAS: Tony Burke, thank you for your time.

BURKE: Great to talk. See you.

KARVELAS: That's the Minister for Employment, Workplace Relations and the Arts, Tony Burke.