SUBJECTS: Secure Jobs Better Pay bargaining changes to take effect, closing the labour hire loophole, getting wages moving again, upcoming referendum.
ANDREW CLENNELL, HOST: Joining me now is the Workplace Relations Minister, Tony Burke. I'll get to that campaign in a second, Mr Burke, thanks for joining me. But I wanted to ask you first about the multi-employer bargaining legislation coming into effect tomorrow. What does this mean for workers and bosses? How do you expect it to progress from here?
TONY BURKE MP, MINISTER FOR EMPLOYMENT AND WORKPLACE RELATIONS, MINISTER FOR THE ARTS: What I expect we'll see tomorrow is the start, particularly in some feminised industries, of some multi-employer bargaining. Whether they register tomorrow, in the next couple of days, not sure. But what we'll start to see now is particularly in those industries that previously haven't been able to get good access to enterprise bargaining, that multi-employer bargaining processes will start. You'll find in some of those, which will be counter to some of the debate last year, you'll find in some of those, some of the employers very, very keen to embark on that. You've only got to remember the way a whole lot of the childcare centres, early childhood education businesses were arguing that they wanted a way of being able to use some of those streams that we made available last year for multi-employer bargaining. What does all of that ultimately mean? When you get a bargain, you're always paid above the award, and if you can get that going in feminised sectors as well, it’s not just part of getting wages moving, it's also part of closing the gender pay gap.
CLENNELL: Alright, well speaking of wages, we saw these decisions on Friday. Why are you so confident that these wage increases will not drive inflation up even further, and then we cop it back in interest rates?
BURKE: It's not just me, it was also President Hatcher, the President of the Fair Work Commission, when he delivered the decision last week was quite specific that the decision that had been made in the view of the commission having weighed up all the evidence, was neither going to cause nor contribute to any sort of wage-price spiral. I think one of the -
CLENNELL: Mr Burke, he's the guy you appointed, right? So, I guess you would expect him to have a similar view to the Government.
BURKE: There's plenty of times you appoint people and they end up making different decisions, there's plenty of independence about the Fair Work Commission. But one of the facts that he gave when he made that decision, I think, is really pertinent. He went back to last year's decision and said it was roughly only 10 per cent of the total wage growth that we then saw was as a result of that decision. When you take that into account, and that's because the people who rely on this decision tend to be at the lower end of the income pain -income spectrum. To have a situation where wages is just one of the issues that gets weighed up in all the different issues talking about inflation - these are the people who are the lowest paid, it's 10 per cent of the total wage growth across the country. It's a real stretch to start blaming cleaners for interest rate decisions.
CLENNELL: Alright. Well, Philip Lowe, however, said last week that wage growth without productivity means more inflation and higher interest rates. He told the parliamentary committee that -- the Senate estimates. I can understand why, as a politician, you want to say there's no connection between the two, but the Reserve Bank Governor seems to think otherwise.
BURKE: Let's bear in mind, as I just said, we're talking about 10 per cent of the total wages growth that happens across Australia. That's what we're talking about. And these are the people who find it hardest to make ends meet.
CLENNELL: Okay, but every single - Mr Burke, every single measure that you're putting into place, whether it's same job, same pay, whether it's multi-employer bargaining - and there was a decision which wasn't just minimum wage last week - it's all about pushing wages up, isn't it? And yet you're still confident that won't have an effect on inflation. You're absolutely confident of that.
BURKE: You’ve got to remember that we're off the back of ten years where wages were deliberately kept low. There's a bit of rebalancing that has to occur here, that people have had flatlining wages for close to a decade, and there's an issue now of people being able to get ahead again. As inflation goes down, and the Budget projections from Treasury that were in the Budget papers said that in the next financial year, it was forecast we'll get to inflation with a three in front of it, during the course of that time, that we want to see that point where the lines cross and wages start to get in front of inflation. For a long time we were told, "You can't have wage increases now because inflation is low." Now some people are saying, "You can't have wage increases now because inflation is high." We're focussing on the people who are doing it the toughest. They're people - they're in jobs, but they're not working for a lot. And you know, $1.85 an hour for someone on the minimum wage, that's not going to affect the decision of the Reserve Bank.
CLENNELL: Alright. How do you feel about the prospect of a rate rise tomorrow?
BURKE: The Government's been doing what it can to try to put downward pressure on inflation. Phil Lowe, in that same address to the committee that you referred to, made specific reference to the Budget where he said, if anything, the Budget was putting downward pressure on inflation. There's a lot that the Government can do, and we're doing that. We're also trying to make sure that where we provide cost of living relief, we do it in a way that doesn't add fuel to the fire of inflation. I don't think you'll get a better endorsement than what the Governor of the Reserve Bank said to the Parliamentary Committee last week.
CLENNELL: Alright, let's play this ad now that the business groups have released today, and then I'll ask you about it.
CLENNELL: Are you quaking in your boots at the prospect of this campaign?
BURKE: I'm not sure who they're campaigning against, is part of the issue with all of that. I mean, when - The Government conversations’ about closing loopholes and the business conversation today has been plain loopy. The arguments that they're putting forward - and I've watched the press conference that played on Sky News today from the business groups, and they were claiming that it means that you can no longer pay someone more because they've been in your business for longer. It’s just not true. Not something I've ever said. I went back to the consultation documents they were given. It's not in there. All I can presume is that they know that this loophole is indefensible, and they've decided to argue against something else. Because what the loophole is, Andrew, is where you have an enterprise agreement and a business has agreed this is the fair rate of pay, that you shouldn't then be able to just go to labour hire and say, "OK, now we've agreed to it, we're going to undercut that rate anyway." And there'll always be a place --
CLENNELL: It's pretty broad, this, isn't it? I mean, I know you've just put out discussion paper, but it could capture a lot of workers, a lot of employers. Do you have an estimation of how many workers this could affect?
BURKE: We haven't landed on the final legislation, so to be able to offer that at the moment is premature. But most businesses, well for a start, you gotta start -- we're talking about something for businesses where there's enterprise agreements. Now, I heard the National Farmers Federation were talking about family farms. I'm not sure how many of them have an enterprise agreement, but that's what they were talking about there. There is a proper use for labour hire. When I've employed people over the years, before I was a Member of Parliament, I'd use labour hire for a time. You use it for surge capacity, you use it for specialist workforce. It just should never be used as a loophole, as a way of undercutting a rate of pay that you'd otherwise agreed to.
CLENNELL: All right, Commonwealth departments use a lot of labour-hire firms, don't they? Could this cost the taxpayer a bit? This same job, same pay. Call centres and things like that?
BURKE: I think you'll be hard-pressed to find too many Commonwealth examples where it's being used for the purposes of undercutting a rate of pay. As I say, if it's being used for search capacity, I think that's legitimate. If it's being used to get in some sort of specialist or something like that, I think that's completely legitimate. But when I was up in the Hunter Valley a couple of weeks ago, one of the miners I was chatting with, he'd worked for something like - I forget how many years, might have been eleven years or something like that - where he'd worked for a labour hire firm doing the exact same job that he's doing now, but being paid less. We're not saying that companies should be paying any more than what they've agreed to. But if you've actually agreed with your workforce that this is a fair rate of pay, that this is the rate of pay that reflects the productivity of the job, then I don't think you should be able to just say, "But technically now, the next person we're bringing in is from a labour-hire firm, so we're going to undercut everything we just agreed to."
CLENNELL: Well, just finally, The Voice and this latest Newspoll, it's not looking good, is it?
BURKE: We're in this because nearly a decade ago, you had a very big consultative process there and something very modest was requested. We do need to get the message out that it's only about two things: that it's about recognition and it's about listening. There'll be a fear campaign that's just started up that will try to say, this referendum is about a million other things and we're seeing some of that reflected at the moment. We just need to keep making clear that as many people as possible, by the time we get to the day that people vote on the referendum, understand that this is about recognition and listening. That's all the referendum is about, that's what we're asking people to vote for, and it has the capacity to be a really good moment for Australia. And I don't underestimate the generosity of Australians in us getting there.
CLENNELL: Tony Burke, thanks so much for your time this afternoon.
BURKE: Great to talk.