LAURA JAYES, HOST: For now on this is the Workplace Relations Minister Tony Burke. Tony Burke, great to see you. Great to have you back on the program.
THE HON TONY BURKE MP, MINISTER FOR EMPLOYMENT AND WORKPLACE RELATIONS, MINISTER FOR THE ARTS: Hello.
JAYES: It’s been a while.
BURKE: It has been a while. Sorry about that.
JAYES: To Ross Greenwood’s point about wages, first of all the Reserve Bank Governor warning about excessive wage claims, do you think the ACTU’s claim fits into that category?
BURKE: Look, they put in their own submission and we put in ours. Our submission will go in tomorrow. But as I said yesterday – which wasn’t quite what Ross just said that I’d said – what I said yesterday was that our values haven’t changed and the values that we put forward in the submission last year will be the same values that we put forward in what goes in tomorrow.
Effectively, what we did last time and the principle that we still hold to is that people who are on the lowest rates of pay, they don’t have any space to be able to go backwards. You know, they’re people who on the lowest rates of pay are least likely to have any savings. While inflation is now starting to moderate in the numbers that we’re seeing, which is good – 6.8 per cent is still very high – the people on the lowest hourly rates there they just don’t have any room to move. It’s not like you can expect people to, you know, be in a position where, what are they meant to cut? Their food? And so the position from the government that we took last time and you’ll see something similar tomorrow is the concept that people on those lowest rates of pay shouldn’t be going backwards.
JAYES: What is your number one priority then? I think it’s a fair question. The government, monetary and fiscal policy, flat out at the moment trying to bring inflation down because we know what it does to those on the lowest income. Actually for poorer people inflation is terrible. Those at the higher end can absorb it. So, if you’re going to give two and a half million people a 7 per cent wage rise isn’t that going to be inflationary?
BURKE: Well, first of all you’ve just said something quite different to what I said. I referred to the people – you’ve referred to the entirety of the award system. I’ve been referring to the people on the lowest pay.
BURKE: The numbers that you referred to, like, there are some people on some awards – pilots and the like, where you’re quite a distance up the income scale. In terms of people on the minimum wage, you’re in the order of 200,000 to 400,000 people at any point in time. You’re not talking large numbers of people, but you are talking about the people who are most dependent on the annual wage review.
JAYES: Fair enough. But if we go to what the union is calling for today – two and a half million people getting a wage rise – could we see that as inflationary? Would the RBA be a bit concerned about that, do you think?
BURKE: The RBA will make its decisions. The Fair Work Commission will make its decisions. The unions will put forward their submission and we’ll put forward the government’s submission. So I’m not going to, in advance of our submission coming out – which it will tomorrow – be giving a commentary on the unions. But what I will say, which is certainly true, is two things: one, people are really feeling pain with respect to inflation, and while it’s moderating, it’s still very difficult out there. Dealing with wages and getting wages moving is part of helping people deal with cost of living. You can’t have a cost-of-living conversation without also wanting to help people with wages.
But point two, we know that inflation is not being driven by wages, by high wage growth. We know inflation is not being driven by high wage growth.
JAYES: Well, not yet.
BURKE: Yeah so, we know inflation is not driven by high wage growth because we don’t have high wage growth in Australia. The wage price index at the moment, while inflation is running at 6.8 per cent, even after the decision we had last year from the annual wage review for 5.2 per cent for the lowest wage earners, that’s resulted in a wage price index of 3.3. So to be helping the people who are doing it the toughest doesn’t mean that you’d then get that ricocheting the whole way through the wages system.
JAYES: Okay. So to Ross’s question, then, if you’re looking at it broadly – and I assume that you’re not going to put a figure in your submission –
BURKE: No, we don’t.
JAYES: Like you did last time, but to Ross’s point, broadly, do you want wages to increase in line with inflation? And what inflation rate are you looking at?
BURKE: Yeah, the principle – and the principle that we put forward last year, and you’ll see something similar without me giving you exactly what we’re doing tomorrow, you’ll see something similar – the principle that we put forward is that the people who are doing it the toughest on the lowest wages can’t afford to go backwards and that that’s something that the Fair Work Commission should be bearing in mind.
JAYES: Okay. So give us a little bit more of a hint about what might be in this submission. Is it just going to be the same as last time –
BURKE: I’ve given you a lot. I’ve given you a lot. Look, we don’t photocopy it and the economic circumstances are different, they always keep evolving.
JAYES: Well, what’s changed? Okay, perhaps this is a better question then – what has changed since your submission last time?
BURKE: One of the things that’s changed for people from 12 months ago when the submission last went in, is now there’s a whole lot of actions that have been taken by the Government to try to help with cost of living. What’s happened, for example, with prescriptions, having that cut in the cost of prescription medicines for Australians, is an action that’s been taken that’s relevant for cost of living. What starts on the 1st of July with respect to childcare and reducing prices there, is an action that’s been taken with respect to dealing with cost of living.
But the principle that often gets put forward, which the Government simply doesn’t accept at all, is an argument that somehow the inflationary problem in Australia is the fault of ordinary wage earners and particularly low-paid workers, and it’s not. The concept of them somehow suddenly being responsible for inflation is an argument the government doesn’t accept.
JAYES: Well, they are the victims of it, in fact.
BURKE: That’s exactly right.
JAYES: And the RBA – that’s right. So inflation is not due to wages; it is due to really what we can’t control, yet the RBA punishes those with the least money. Is there a better mechanism or have we just got to live with that?
BURKE: Look, there are some things that we can do. The RBA is independent, and it should be independent. There’s a review of how it operates that Jim Chalmers has been dealing with. But the independence of the Reserve Bank is something that’s not in question.
BURKE: There are some things that are international the Government can’t control with respect to prices. There are some things we can do. As I said, medicines, there were things we could do. In terms of putting some constraints on the incredible price spikes that would have otherwise happened with respect to energy, we put legislation through the Parliament in December last year. Our opponents voted against that, but had that not been in place we would be seeing a much worse cost of living scenario for people right now on energy.
JAYES: Okay. To that point as well, what is 650,000 more migrants over the next two years going to do?
BURKE: This is where – when I used to be – and you were interviewing me about it at the time – when I was Population Minister –
JAYES: We’ve both been around a while, haven’t we?
BURKE: That’s right. But not long enough! But back when I was Population Minister I used to always refer to net overseas migration, as you know – you get lies, damn lies and net overseas migration, because it can be a very deceptive figure because it doesn’t just involve who’s arriving; it also involves who’s leaving. So the immigration figures at the moment, we still won’t have caught up on what happened with people leaving during the lockdown period of the pandemic.
JAYES: Won’t 650,000 catch us up? I thought that would more than catch us up.
BURKE: That figure, one of the deceptions that happens with that figure is necessary overseas migration is people arriving versus people leaving. We have – and it’s really important for the Australian economy – a significant industry and a lot of jobs associated with overseas students coming to Australia. Normally overseas students arrive and you’ve got a similar number who are finishing their courses who are leaving, so those numbers offset each other.
We’ve got a situation at the moment we’ve you’ve got overseas students returning to Australia, which is a really good thing, but you don’t have as many people completing courses and leaving, which would have reduced the number. And at the moment you don’t have as many Australians leaving and going overseas. So while the number if you look at it in those terms looks particularly high, there’s actually some things going on at the moment that mean it’s not actually having the economic impact that you’d otherwise think.
JAYES: Okay. We’re in Budget speculation season. I know how these things work – this was released by Treasury that, you know, wouldn’t have been done by Treasury alone, so this is obviously something the Government wants out there. Therefore, you know, are we expecting to see something in the Budget to this point?
BURKE: I’ve given away a few things with respect to tomorrow’s annual wage review; I’m not about to give you the Budget. But worth asking – I get it.
JAYES: All right, okay, thanks. We both know how these things work, so we’ll wait and see.
JAYES: Tony Burke, thanks so much. We’ll get you on again soon.
BURKE: Good to be able to talk, Laura