Interview – Sky News with Andrew Clennell

SUBJECTS: jobactive, Workforce Australia, Points Based Activation System (PBAS), minimum wage, wages growth, enterprise bargaining, energy crisis, Julian Assange

ANDREW CLENNELL, HOST: Welcome back. Well, I'm joined now by the Employment and Workplace Relations Minister, Tony Burke. How are you? Thanks for joining us. You came into Government with the previous government having decided to replace a system called jobactive with a new points-based activation scheme. And my understanding is you're about to dump this scheme. Why?

THE HON TONY BURKE MP, MINISTER FOR EMPLOYMENT AND WORKPLACE RELATIONS, MINISTER FOR THE ARTS: Well, we're not dumping it. Look, it's a $7 billion contract. Tenders that were all settled before we went into caretaker, and starts at the beginning of July. Now, there were aspects of the old jobactive that did need to change. So, the 20 applications a month, it wasn't getting people into work and it was driving employers spare of people applying for jobs that they weren't the right fit for anyway. So, to have a more flexible system, good idea. There's two things with what the government's- the previous government designed that I'm really concerned about. The first is automated messages telling people that they might be going to lose their benefits. Now, post Robodebt, that just sets alarm bells off. And I'm working with the department this week to see what we can do about those automated messages. I'm really concerned about that.

CLENNELL: [Talks over] You'd like to stop them, I assume?

BURKE: I'd like to stop them, reframe them, work out how can- people want to- need to know where they're up to. But if things are being framed in a way where it's becomes instead of a Robodebt, a Robo-cancel, then we saw how that story ended last time. The other thing is the system; not just complex, but there's some anomalies in what they've done that I find really weird. So, if you're doing a full-time course, you know, be it an English language course or a full-time course to get yourself job-ready, that still doesn't get you there in terms of the number of points. So, you're still having to apply for other jobs, which if you apply for and you get an interview, you then can't finish your course. The people who are unemployed now, it's in the job market we've got now, it's a different group of people, largely much more higher proportion of long term unemployed. Business needs these individuals to be job-ready. What the government's designed, some of it's more punitive than actually getting the job done. We want to make sure, and I'll be changing it over the course of the next week, to make sure that we can have a system that's designed to get people into work. Rather than some media stunt to punish people.

CLENNELL: Have you had any briefing as to why they were introducing this? Clearly, it wasn't announced before the election.

BURKE: Yeah, look, the initial concept of it that had been said a while ago is right. Which is to say, 20 applications a week being the only measure is the wrong way to go about things. So, being able to take into account if someone's getting a forklift licence, a driver's licence, things like that, they are valid things to take into account. So that concept's fine. The automated messages, it's a disastrous way to go if you do that the wrong way. And secondly, the points system. I want proper points given to somebody if they're trying to get a forklift licence or trying to get their driver's licence. I want to make sure that if you're...

CLENNELL: [Talks over] So you want to retain the points system?

BURKE: The concept of the points system, it's actually too late to not have a point system at all. It's about getting inside it and making it logical, and making sure that when all these contracts take effect in a couple of weeks’ time, we've actually got a system that helps long term unemployed people connect themselves and get working again.

CLENNELL: You believe in the concept of mutual obligation?

BURKE: Absolutely.

CLENNELL: Okay. We've seen this minimum wage decision during the week. The biggest thing during the week for you. Is it time, pensions and JobSeeker and the like were also increased by 5.2 per cent?

BURKE: Those decisions go to the budget. And we said during the campaign, all of those benefit payments, they get reassessed for what's affordable every budget. This time we don't have to wait for a budget next year, because there'll be an October budget and an assessment will be made of those with the full economic circumstances.

CLENNELL: [Talks over] I assume there will be an increase in those payments.

BURKE: Look, I'm not a member of the Expenditure Review Committee. There's others working through that issue.

CLENNELL: You said last week that this wage rise is just the start. What does that mean for inflation? Could we have five per cent a year increases in the country from now on?

BURKE: Well, let's remember, inflation is not being driven by high wage growth. We know that for a fact.

CLENNELL: It could be, though.

BURKE: Well, we don't have high wage growth. We don't have high wage growth.

CLENNELL: We're about to have it.

BURKE: The wage index has been running at 2.4 (per cent) At the exact same time that inflation was coming in at 5.1. The drivers of inflation, some of them are international, some of them are previous government neglect. So, what's been happening in energy prices, what's been happening with skills shortages, they're domestic issues.

CLENNELL: [Talks over] I accept all that. But if you raise wages by five per cent, and then maybe another three per cent, and then maybe another three percent, doesn't that drive up inflation? Do you accept that?

BURKE: Well, what I'll accept is what the Governor of the Reserve Bank said on that point, and what the Secretary of Treasury said on that point which is, if all wages are doing are keeping up with inflation plus productivity, as long as you don't go beyond those two combined, you're not having an inflationary impact.

CLENNELL: So, if inflation is eight per cent this year, if wages rose by eight per cent, it wouldn't have an inflationary impact?

BURKE: Well, I'm not going to get into the hypotheticals-

CLENNELL: [Talks over] But, that's what you've just said, isn't it?

BURKE: No, no, no. What I just did, was I quoted the advice we have to date from the Governor of the Reserve Bank and the Secretary of Treasury. If in the context of where the economy’s now, and they update that advice, we'll look at that advice as it comes. But right at the moment, for the shift we've just had, no one can argue that it's inflationary. And the people who [inaudible]...

CLENNELL: [Talks over] You said this is just the start.

BURKE: That's right.

CLENNELL: You said this is just the start. So, if inflation continues to rise, you're also expecting wages to go up?

BURKE: I'm going on what's been provided by the Governor of the Reserve Bank and the Secretary of Treasury. But I'll also say, some of the things we need to do on wages don't simply go to, do wages go forward. It's to stop them going backwards. We've got people on zombie enterprise agreements that date all the way back to the Howard government and WorkChoices. We've got people in the gig economy who aren't even guaranteed being paid the minimum wage, let alone the increases to it. We've got people in labour hire where it's being used at the moment, not just to deal with surge capacity but to undercut the rate of pay at a site. These issues on wages all have to be dealt with.

CLENNELL: How many people will be affected by the minimum wage decision? I mean, not just the- I think it's 2 million people were on it, but how many people in awards that are subject to it? How many people will get five per cent?

BURKE: The minimum wage itself is in the order of 200,000. Okay. It's a bit less than...

CLENNELL: [Talks over] So, when they say two million, that's the awards? Is that a rough figure?

BURKE: [Talks over] Two to three million takes you into the award system. So, the vast majority of those people, it's a 4.6 per cent increase.

CLENNELL: Sure.

BURKE: For the people at the lowest end it’s a 5.2. No one gets less than a $40 a week pay rise if they're full-time adult.

CLENNELL: You made comments you wanted to revitalise enterprise bargaining. Would you look at the better off overall test? Because that seems a way, if you make agreement with the employer on certain conditions, you can lift your wage.

BURKE: Look, we'll see what comes out of the jobs summit, but if I start on this basis. One of the reasons I want to get enterprise bargaining moving, well, there's two. One's productivity, the other's to get wages moving. We've had a decade of wage stagnation. That wage stagnation happened when we were told we couldn't have wage improvements because inflation was low. Now, people are arguing- some people are arguing that we can't have wage improvements because inflation is high. I want to get wages moving, and enterprise bargaining has been the best way of doing that, hand in hand with productivity. But when you say the better off overall test, I'm not interested in changes that just deliver enterprise agreements but allow wages to go backwards. What's been put previously on the better off overall test, including legislation that was put forward under the previous government, was about allowing wages to go backwards. That's not the sort of enterprise bargaining I want to get.

CLENNELL: But you could reform the better off overall test, by the sound of things?

BURKE: I've got to tell you on that. I've got no plans to do it and each of the plans that have come forward on better off overall, that I've seen so far, have been about taking backward steps on wages. I'm open to having a look if there's something on that that delivers wage increases and delivers improvements in productivity, I'm there for the conversation. But as I say, I am absolutely not interested in anything that is just a new design to get wages going backwards. We've had enough of that over the last decade.

CLENNELL: [Talks over] How else would you get enterprise bargaining going, I guess?

BURKE: There are a million issues of red tape in enterprise bargaining.

CLENNELL: [Talks over] Give us a couple of quick examples.

BURKE: Well, say if you're a small business, COSBOA have been talking to me about this for a long time. If you're a small business, the various rules, the timeframes, the different things that you have to do in terms of the meetings, and the complexity of what you're dealing with, it's just too difficult for an individual small business to be able to engage that way to be able to get the productivity outcomes that they want. And a lot of the productivity outcomes that have come traditionally from enterprise bargaining, from getting rid of demarcations of different awards in different parts of the same store. Like there are some, for example, service stations where you can go from the person on the petrol through to the person serving the food where you've got radically different awards. And at a small business level, if we can find ways of cutting some of that red tape, I think that's a smart way to go. And potentially you can also there, you get the productivity dividend and you can get wages moving.

CLENNELL: Right, nearly out of time. I wanted to ask about the energy crisis. Angus Taylor, you just heard him, says you can do more. But Chris Bowen doesn't know how to connect with the companies and I guess threaten and cajole them into keeping supply going. What do you make of that?

BURKE: I found it an extraordinary interview. There was no responsibility taken for anything. And the big thing on how do they get supply going? His example was Kurri Kurri, which they announced but hasn't been built. There was no example that he gave other than to say, oh, we had conversations with different people. That in fact delivered anything, and no sense of ownership of what we have in the energy market right now. Turning around ten years of neglect takes time. There's work involved in being able to do that. But I'll tell you what, with Angus Taylor, if he has plans to treat the Australian economy the way he treated the national energy market, they're not going to come up with very many good ideas.

CLENNELL: Okay. Has he got a point, though? You promised $275 off bills. It looks pretty unrealistic right now, doesn't it?

BURKE: Look, we stand by the modelling that was there, that the impact of what we'll do, in particular with transmission, allows you to get cheaper energy onto the grid. Renewables are the cheapest form of energy, but if you want to get your renewables and your battery storage onto the grid, you need to improve transmission. The energy market organisations have been putting this forward for a long time. The previous government refused to act. It's a significant part of the problem right now. It'll deliver that downward pressure on prices. We'll get it done.

CLENNELL: Just wanted to ask on Julian Assange. Again, we're nearly out of time. What do you think should happen in terms of him?

BURKE: Look, we're not going to conduct diplomacy by megaphone. This case has gone on for far too long. For far too long. We said that in opposition. We've repeated that in government.

CLENNELL: [Talks over] Well, what does that mean? Should he still face trial? Or should he, you know, should he be pardoned, or what does it mean?

BURKE: Penny Wong's put out a media release making it completely clear that it's been gone on for too long. The issue needs to be brought to a close. Australia is not a party to the prosecution that's happening here. Each country has its own legal system. The days of diplomacy being conducted, and conversations with government being conducted by megaphone, text messages being exposed, that was the way the previous government behaved. We've been building constructive relationships again with our allies and they're conversations that happen in government-to-government. I know you want more. That's all I'm going to say.

CLENNELL: Tony Burke, thanks so much for your time.

BURKE: Great to be back.

[ENDS]