Interview - RN Breakfast with Patricia Karvelas

PATRICIA KARVELAS, HOST: After knocking down a crossbench carve-out of his controversial industrial relations Bill, Workplace Relations Minister Tony Burke has done a deal with a key resources group. Now, the unlikely alliance involves the Government agreeing to concessions excluding service contractors from the same job, same pay Bill. It brings the Australian Resources and Energy Employer Association to now support the Government’s Bill when they were very actively against it. But the Government still faces an uphill battle to actually get it through the Senate. 

The Minister, Tony Burke joins, us this morning. Minister, welcome back to the program. 

TONY BURKE, MINISTER FOR EMPLOYMENT AND WORKPLACE RELATIONS: Great to be here, Patricia. 

KARVELAS: When you announced the bill it was estimated around 67,000 labour hire workers would have their pay increased by the changes. Does this concession change that number? 

BURKE: No. No, because we always wanted service contractors excluded. I probably should explain for people not familiar with some of these industries, the difference between labour hire and a service contractor is a labour hire company just provides workers, whereas a service contractor will provide machinery, their own systems, their own management. So, for example, on a mine site you might have service contractors come in with some of the heavy machinery for particular work. You might find service contractors delivering the food resources, for example, providing the menus and the food and all of that for the meals on site. So that’s the difference between the two. 

We wanted to exclude service contractors, and I formed that view really strongly after I – Steve Knott, the person who heads up the resources organisation you just referred to, brought in a group of service contractors, and it was clearly a different situation to labour hire. So we wanted them excluded. 

The legislation that we introduced, there were some concerns that we hadn’t done it clearly, and there’s been a lot of conversations back and forth with that resources organisation, AREEA, to make sure that we now have - and will have when Government amendments are introduced next week - a clear exclusion of service contractors. 

KARVELAS: So what was unclear about it? Because earlier this year you said services contractors were already carved out unless the service was effectively labour hire. So how is it strengthened? How have you made it clearer? 

BURKE: Yeah, so effectively the wording of the legislation originally was to give the commission a discretion about excluding service contractors. The new wording will just have a straight exclusion that if it is a service other than the provision of labour, then they are excluded. So that discretion that otherwise would have been there with the commission won’t be there under the amendments. And that just gives a really clear line drawn that if it’s labour hire it’s covered; if it’s service contractors, it’s not. 

And the outcome of this will be really simple: which is the policy objective we wanted from the start, which is if a company signs up to an enterprise agreement and they have determined what the minimum rates of pay are, then they’re the minimum rates of pay for that work, even if they bring labour hire in or manufacture another company within the corporate group to say, “Oh, technically it's a different employer.” If what’s being provided is labour, then the rates of pay that they’ve agreed to can’t be undercut. 

KARVELAS: So you’ve done a deal with a group that was pretty actively campaigning against your legislation. But there are others who are still very upset that your legislation is overreach. Minerals Council of Australia CEO Tania Constable says this is an attempt to “hoodwink the Parliament and the public”. What’s your response to that? Is this deal about sort of creating the optics that you’ve got business on side when, in fact, some key groups are against it? 

BURKE: Look, the Minerals Council will never be on side with this legislation for the very simple reason that one of their key members – BHP – uses the labour hire loophole in a very significant way. So they will be funded to run a campaign and they will run a campaign. And, you know, the quotes from the Minerals Council today, when you have a look at them - they haven’t seen the amendments but they know they oppose them. They know that this won’t do the job. And they’ve even described Steve Knott, the head of AREEA, that resources organisation, as a “soft target”. Which I have to say having been in debates with Steve Knott on the other side for quite a few years now, he is a very resolute contributor on behalf of his members. And this was not an easy negotiation. This was not something where they felt any need that they had to reach a compromise with the Government. They wanted to be a hundred per cent sure that their members would be excluded, and they are. 

But the people who aren’t excluded are the companies that are using this loophole. You know, effectively what the loophole does is it allows people to be underpaid. There is an agreement in place that says these are the minimum rates, and through a device through either labour hire or inventing another company within your own corporate group they say, “Oh, technically it’s a different employer now. So all the rates of pay we just agreed to don’t apply.” Now, you know, one of the things about how unreasonable this loophole is, is no-one wants to actually argue the issue. No-one wants to come out and defend that you should be able to undercut rates of pay that you’ve previously agreed to.

KARVELAS: Well, the Minerals Council have a multi-million dollar campaign against the Bill, and it will continue. Are you trying to get them on side or just like you’ve worked on some of these other groups, or do you just accept that they will spend millions of dollars campaigning against the Government and this Bill? 

BURKE: We’ve brought them into the discussions the whole way through. I made the decision in good faith to do that right at the start. So they don’t have a history of being involved in the different committees within my portfolio. But I brought them in anyway as a show of good faith. That said, I don’t think there is any scenario where they end up supporting the Bill. But, you know, as people watch the millions and millions of dollars worth of ads over summer, I think a lot of Australians will be saying, “Why are you spending the money on ads rather than just paying your workers?”. To have two people doing the exact same job with the same level of experience and the same level of authority working side by side on radically different rates of pay is simply not fair. It’s not how things should be. 

Sometimes, this loophole is used in ways that the person supervising staff is paid less than the people they are supervising. This is a loophole that should have been closed a long time ago. I appreciate that companies that are saving money and have a lower wages budget will run a campaign to try to make sure they don’t have to pay their workers the rates that they’ve agreed to. Now, that’s what they’ll do. But I think the Australian public will see through this campaign pretty quickly. 

KARVELAS: Does this deal you’ve done with Steve Knott’s group get you any closer to getting this through the Senate? 

BURKE: Look, I think it’s a dangerous interview when any Minister predicts the Senate. 

KARVELAS: No, but they’re the ones you need to get on side to get your bill through the Parliament. 

BURKE: That’s right. Well, if I start with - the first principle is we have better legislation as a result of this agreement. We have better legislation and we avoid unintended consequences. So, that’s a starting point. In terms of the conversations with the crossbench, I continue to reach out to the crossbench. There’s a series of meetings that continue to happen. They’ve made a decision that they don’t want to deal with this Bill until next year. I would rather we were dealing with it over the next fortnight. We certainly will be dealing with it next week in the House of Representatives.

KARVELAS: But the Crossbench, Minister, tried to carve out four separate Bills from your industrial relations reforms to help emergency workers and survivors of domestic and family violence to give them protections immediately because of the delay that you talk about. But that’s your own legislation. Why did you oppose your own legislation? 

BURKE: Well, we haven’t opposed it. What the – those crossbenchers haven’t focused on is the Senate inquiry that needs to come back for recommending amendments to those exact same provisions was also postponed until February next year. So immediately after those four Bills went through – and, you know, I’m not opposed to the content of the Bills. It’s my legislation that’s basically been photocopied and put into four different Bills. 

KARVELAS: Which means that you can pass it, right? 

BURKE: But all four of those Bills, all four of those different sets of provisions - people have made submissions to the Senate inquiry recommending amendments to those, to all four sections. That Senate inquiry could have reported this week. The majority of the Senate, including the sponsors of those Bills, for reasons I will never understand voted to put off that inquiry reporting date so that even if they were ready to report they were not allowed to until the 1st of February next year. 

So, as a result of that, immediately after passing those Bills they guaranteed that they wouldn’t be able to be concluded in the House of Representatives. You certainly can’t have a situation where you go to an inquiry, you ask victims groups of all groups to put forward submissions and then you rush through the legislation before you’ve had a chance to even consider amendments that they’re recommending. That would be a shocking way to make public policy. The committee should have been allowed to report as soon as it was ready to and then we may well have been in a situation where we were dealing with the entire Bill this year. 

KARVELAS: Minister, you are the Minister responsible for industrial relations and jobs. A survey to be released today by the longstanding Australian HR Institute shows 31 per cent of its members are expecting to retrench staff this quarter. Just three months ago it was 17 per cent. Are you alarmed by the predictions around jobs? 

BURKE: There is no doubt that the decisions of the Reserve Bank are making an impact across the economy. There’s no doubt about that. And this is why it is more important than ever that as a Government we’re doing what we can to help people in the current circumstances, both with cost of living. That same report goes to people with health care, which is why cheaper medicines are so important, why getting bulk billing moving again is so important and also why getting wages moving is so important. But when actions taken to slow the economy in different ways, it does have an impact – 

KARVELAS: Do you worry that they’ve gone too far and that we’re about to see a significant hit to jobs? 

BURKE: They have their role, we have ours. What I will say is, we have record low unemployment right now – record low. And we view that as a strength. Every single Australian who we can find into a job, that is a good outcome to have. And so we’re presiding over the best jobs outcomes right now of any first-term government. And no other government has come close, and we're only 18 months in. The jobs story from this Government is really positive. And that’s something – we’re proud of it. We’re continuing with that work. We just want to make sure that in those jobs people aren’t underpaid and people get good wages too.

KARVELAS: Minister, last time you were on the program we talked about the war in Gaza and you made a lot of headlines out of that interview. We are several weeks on from that and last night I just want to ask you about something very local – about 400 people waving flags and calling for a ceasefire in Gaza gathered near a boat ramp in Sydney and were met by local and mounted police and the force’s riot squad. They were there to protest the arrival of an Israeli-owned container ship. Is that appropriate protest in your view? 

BURKE: I’m always wary of – and I’m not saying this about any of those protestors; I haven’t seen the footage of those protestors themselves – I’m always wary of where some protests can morph or ignite in different ways anti-Semitism, and I’m always very wary of protests of that nature. But let me say this: the view of the community that I represent is very much they just want the deaths to stop. That’s what they want.

KARVELAS: They want a ceasefire, a lot of the people in your community. 

BURKE: Yeah. 

KARVELAS: But your Government hasn’t supported one. 

BURKE: Yeah, well, Penny Wong has said that we need to work through the steps towards a ceasefire. Penny Wong made those comments on Insiders a couple of weeks ago. And, I met last week – a bit over a week ago now with Mona Sakr, one of the Australians who Australia helped get out of Gaza. When you hear the stories that are happening on the ground, it’s horrific. And so, yes, the views are very strong. I’m limited in what I can say about that particular protest as I haven’t seen the footage on that. But. what I can say is there a desperation of people wanting the deaths to end and – 

KARVELAS: Can’t that only happen with a ceasefire? That’s what the protest movement is calling for. 

BURKE: And I’ve repeated what Penny Wong has said in terms of wanting those steps towards a ceasefire to be taken. 

KARVELAS: Minister, thank you so much for your time. 

BURKE: Great to talk. Thank you.

KARVELAS: Minister for Industrial Relations Tony Burke there. And you’re listening to ABC RN Breakfast.