NATIONAL PRESS CLUB ADDRESS
16 NOVEMBER 2022
SUBJECTS: Multi-employer bargaining; wages; workforce casualisation.
LAURA TINGLE, HOST: Good afternoon, ladies and gentlemen, and welcome to the National Press Club in Canberra and today’s Westpac address. My name is Laura Tingle. I’m the Club’s president. A big year in federal politics is heading towards its final two weeks of Parliamentary sittings – brackets, we hope – with a big agenda of legislative reform to consider from the new Government. The most contentious changes involve the Government’s proposed reforms to industrial relations. Our guest speaker today has carriage of that legislation. Tony Burke, of course, is also Leader of the House, one of the many hats he’s worn over the years in Parliament. That is reflected in the fact this will be the sixth time he’s addressed the club over a period of 13 years in which he’s spoken to us variously as Minister for Agriculture, the Environment and Water and as Opposition spokesperson on immigration and the election campaign. Please join me in welcoming him to speak to us today.
THE HON TONY BURKE MP, MINISTER FOR EMPLOYMENT AND WORKPLACE RELATIONS, MINISTER FOR THE ARTS: Thanks very much, Laura, and it’s a pleasure to be back at the National Press Club. And I acknowledge the traditional owners of the land that we’re on and their Elders past and present. I also want to acknowledge my Parliamentary colleagues, both Alicia Payne and Tony Sheldon, and thank them for coming along today, as well as secretary of my department, Natalie James, and, of course, the Sex Discrimination Commissioner, Kate Jenkins, who’s here. I particularly want to acknowledge the last time I gave a major speech here; it was on the Murray–Darling Basin and Henry Jones – I keep to noncontroversial issues when I come here. And Henry Jones had been one of the great advocates for the change and had made much of it possible. He ended up being not well enough to be here, but I invited him to be one of the two guests I was allowed. Today I just also want to give acknowledgement to Nazish Mushtaq and to Laura Adams because they’re a big part of what’s brought us to be here today. You might not know their names but they’re early childhood educators and without the work of early childhood educators, I suspect the Jobs and Skills Summit would not have landed with the exact proposals that we got to, and I want to acknowledge them as well.
But for the rest of you I’m afraid today is going to be a bit of a disappointment. I have gone through the issues I wanted to cover and realised there is absolutely nothing I can do that can compete with the scare campaigns for an interesting speech. The scare campaigns, they’ve been pretty out there. They’ve been pretty exciting and there’s nothing that I can do that is nearly as exhilarating as some of those scare campaigns. So, to the Master Builders Association, with their campaign saying that the Secure Jobs, Better Pay Bill will result in the construction division of the CFMEU doing multi employer bargaining from site to site, I offer my apologies. They’re excised from the multi employer bargaining sections of the Bill and the scare campaign doesn’t quite work. To AREEA with their $20 million campaign for ads against the Bill claiming that the Secure Jobs, Better Pay Bill will be a disaster for mining – campaign doesn’t quite work. Sadly, I can’t deliver a speech that will deal with that campaign because if you’re on the east coast and you’re on enterprise agreements, then you’re excluded from the multi employer bargaining agreements and if you’re on the west coast, the concept of getting a majority support determination up from the workforce is something that has never come close and so therefore I can’t deliver on that one either.
For the fear campaign about the Bill that has dealt generally with coast to coast strikes, that one I can’t deliver on either for the very simple reason that if there is a version of the Bill that doesn’t involve the common interests test, the public interests test or the employer by employer voting system, then that campaign would work, but the version of the Bill that’s going to the Senate includes all three of those elements.
And to the newspaper editor – who I will refer to bravely, but not brave enough to name – who has written the editorials about pattern bargaining, there I’m letting you down as well. The pattern bargaining provisions in the Fair Work Act, the restrictions on industrial action for pattern bargaining, are already in the Act. They are not changed – not a word, not even a comma.
But the person I’m failing most today to whom I owe the most heartfelt apology is Senator Michaelia Cash. There is nothing I can do that can properly deal with the way Senator Cash has calmly and with characteristic nuance explained that the Bill will close down Australia. I knew from previous media conferences that Senator Cash had a view that a Labor Government would end the weekend. Apparently Monday to Friday are now up for grabs as well. But for all those looking for a yarn, while I can’t deliver anything nearly as spectacular as some of the silliness of some of the fear campaigns, what I can do is pretty straightforward. I can explain what the problem is that the Government wants to fix and why this Bill fixes those problems and addresses those problems. The problems that we’re trying to deal with in a Bill called Secure Jobs, Better Pay, the problems are pretty obvious. We’re trying to deal with insecure work; we’re trying to deal with gender inequality; and we’re trying to deal with flatlining wages. And I want to deal with each of those problems in turn.
First of all, on insecure work there’s an argument that’s often put out there that says we don’t in Australia in fact have a problem with insecure work and the argument runs with the statistic that says over the last 25 years the rate of casualisation basically hasn’t changed. It’s hovered between 20 and 25 per cent of the workforce over those 25 years. The statistic is true, but it doesn’t make the case. It leaves out a few critical factors on insecure work. It leaves out the way there has been a change in who are the casuals today, in the way there’s been an effective casualisation of the permanent workforce and the way in which there has been an evading of the employment relationship with new forms of employment. It also fails to deal how job security has been directly attacked when there’s a lack of employment flexibility. But let me look at those ones in turn.
First of all, in terms of who are the casuals. You know, when I first entered the workforce and went from my role as a paperboy to my role as a casual at what’s now called Myer what was then called Grace Brothers, the system was pretty simple. On a Thursday night and a Saturday, the casuals would work, and the rest of the shifts were very much taken up by a mix of full and part timers on the Monday to Friday shifts with maybe one or two of them doing a Thursday night or a Saturday. You look today, across every hour of the day you find a casualised workforce across retail, for example, but across many parts of the workforce. The industries that used to be viewed as the cornerstone of secure work like finance, for example, or teaching have now found themselves a home of insecure work.
The secondary is the casualisation of permanent work, and it’s happened in two ways. It’s happened with respect to part time work and it’s happened with consecutive contracts. With part time work, it used to be the case – and I’ll stay with retail for a second – the old retail award for New South Wales if you were a part timer it meant every week you were guaranteed 12 hours. You might get a few hours more than that or you might have a contract that took you to more than that, but the fact that you were a permanent employee meant 12 hours would be yours every week. Under the modern retail award, it’s now the case that for those same retail workers they are guaranteed each week no more than the minimum shift of three hours. So, you will now find people working 35 hours a week as part times, where, in fact, three of those hours are guaranteed and the rest for all intents and purposes are like having a casual job, but they turn up in the statistics as permanent employees.
Similarly, back to back contracts where once would have been the preserve of jobs that were genuinely temporary, but now we find increasing instances of somebody on a 12 month contract, at the end of which they go on their next 12 month contract, they go on their next. The job is ongoing the whole time, but that isn’t creating a situation for a worker where they can be at a point where they should ordinarily be claiming long service leave and yet in the real world of their life, they are still every 12 months finding themselves back in a probationary period.
And the impact of that insecurity is real. What happens when you go to a bank and you say, “Oh, no, I’ve got a secure job. I’m working 35 hours a week”, and they ask, “But how many hours are guaranteed?”, and the answer is three. What does that mean for your finances? What does it mean for your finances if you think you have a secure job but when you’re asked about it, the answer is, “Well, I’m secure until my contract comes up in two months’ time”? This insecurity is hitting people who were never previously part of what we called the casualised workforce.
And, finally, we have the new loopholes that have turned up, new loopholes with sham contracting and certainly with the gig economy where people who have none of the power that would be associated with someone running their own small business appear in the statistics as small business people. So, when you say: has the rate of casualisation changed? No, not a lot. Has the story of job security in Australia changed? It really has. And the final layer of that job insecurity, which I’ll talk about in more detail when I get to the Bill, is when the failure to get flexibility at work means for your personal circumstances, you’re given a roster change that means you just can’t remain in the job. And in those circumstances, if the security of a job means that you can no longer meet caring responsibilities, you don’t really have job security.
The second issue we’re wanting to deal with, the second problem we’re wanting to take on, is gender inequality. The figure of 14 per cent just sticks out a mile. A figure that – any level of gender pay gap would be unacceptable. Fourteen per cent is just an extraordinary problem where we know it won’t just fix itself. It sees itself in a number of ways. Bargaining largely hasn’t found its way to feminised industries in the same way as it has to industries that are dominated by male employees. That’s part of the story. Even in areas where people might be better paid, secrecy clauses have allowed there to be an ongoing way of creating circumstances where not only are women paid less than men, but the circumstances are there to try to make sure that no one even finds out that it’s going out. Finally, that issue I referred to with caring responsibilities sadly does affect more women than it does men.
The final issue that we’re grappling with the Bill and the final issue that we want to deal with is flatlining wages. You wouldn’t have found a minister for the last decade or so even view this as a problem. Low wage growth was a deliberate strategy, a deliberate design feature, of the previous government. This Government was elected on a platform to get wages moving, and we intend to. Even the figures that have come out only about an hour ago of 3.1 per cent with the Wage Price Index, that outcome is welcome. It’s evidence and largely driven by what happened in the Government’s action in the Annual Wage Review where we argued absolutely that people should not have been going backwards in that Annual Wage Review and welcomed the Commission’s decision to award the 5.2 per cent increase on the minimum wage, and the way that flowed through in various awards. That’s part of the story with today’s figures. But even with those figures, people are still going backwards. And even if you go to before inflation spiked when that 5.1 figure came out during the election campaign, even before that, inflation was running at 3.5. So, even before the inflation spike, the figure that’s come out today would still have seen workers go backwards.
Now we were told that low wage growth will fix itself. We were told it in a few different ways. We were told that it would fix itself with productivity, that it would fix it have with inflation. We were told it would fix itself with unemployment. But what’s the experience been? With respect to productivity, the argument is still put out there you get productivity moving, you’ll get movement straightaway in wages. In all the statistics that came out on budget night, the one that stayed with me the most was when the Treasurer, Jim Chalmers, announced that over the last decade real wages had fallen. Over 10 years, people had still gone backwards. And even with today’s welcome figure of 3.1 that is still true that over the last 10 years, real wages have gone backwards.
What’s happened to productivity over the last 10 years? It’s gone up 10 per cent. We were told when wage growth was so low under the previous government that that was a reasonable thing for wages to be low because inflation was also low. But some of the same people who made that excuse now offer the argument you can’t have wage growth now because inflation is high. The reasons go diametrically opposed, but the story of just keep wages low remains the refrain.
The final thing we were told, and we were told it repeatedly, including by the previous Treasurer, is that if you got unemployment low in a sustained way, that of itself would create the hydraulic pressure to push wages up. We have now had sustained low unemployment. Any macroeconomist will tell you the hydraulic pressure is there, but wages aren’t moving up in the way that they should. Why? Because as that hydraulic pressure comes through, there’s leaks in the pipes. Leaks as we had a government that didn’t want to fix it because it didn’t want wages to go up. But if you want to get wages moving, you need to start plugging those leaks in the pipes. You need to start closing those loopholes.
The concept of how you can get wages moving beyond the formal systems of the Commission – and we’ve also started to use, as you know, the systems of the Commission with the Annual Wage Review and the Aged Care Review, and we’ve done that with success, but that alone doesn’t get you far enough. We know the great outcome from the industrial relations reforms that came under Paul Keating and Laurie Brereton where with enterprise bargaining and introducing bargaining laws they found a way to deliver wage outcomes for workers which also delivered flexibility and productivity benefits for employers. And out of that period we had huge productivity growth and we had decent wage growth return. But over the last decade, bargaining became stagnant, and agreements fell off a cliff to the point now where only 14 per cent of the Australian workforce is covered by an agreement that’s in date.
So, the Prime Minister as Labor leader during the election campaign knew to get wages moving bargaining had to be one of the issues we’d look at and he started a process. He made a commitment at an ACCI meeting in Sydney at a lunch with Paul Keating there in the audience and said at the Jobs and Skills Summit we committed as a government to put bargaining on the table. The Jobs and Skills Summit was held, and three key areas emerged that required action: to act on gender equity; to act on multi employer bargaining; and to act on reforming the Better Off Overall Test. And so, the drafting began.
In that drafting process – there are businesspeople here and different business organisations and representatives of the union movement that were involved in consultation direct with me and direct with my department. As the legislation was then released formally into the Parliament, further negotiations took place and I’m particularly grateful for both the Business Council of Australia, to COSBOA to ACCI and AiG for engaging, and to the ACTU. Of all the negotiations no one was happy with every element of the Bill, but everyone has been decent enough to understand there’s a determination from the Government to get wages moving and I think sometimes a private acknowledgement that without changing the law we won’t get wages moving.
Let me now look at how the Bill deals with those three issues, and I’ll deal with the Bill in its current form. I know what negotiation in the Senate means and obviously we want to get this legislation through. We want to get wages moving. There’s been respectful conversations with the crossbench. They’ll continue. They’ll probably take off in earnest once the Senate report is tabled, although Senator Sheldon will know more about the timing of that than I will. But on those three issues – job security, gender equity and bargaining – on job security, we will make job security an objective of the Act. We’ll also put a limit on consecutive contracts so that once you’ve gone beyond two years or two short term contracts the next contract is still valid except the end date is not. You’re employed continuously, with the exemptions that you would expect to be there where the funding for a position is genuinely time limited. We’ll also act on the workplace flexibility rules that are currently in the Act. People have thought about this in terms of their own world, a lot of commentators and people who are what we might call ‘the laptop class’ where during lockdown periods were able to work from home. They thought, “Oh, the workplace flexibility is all about us.” I just want to frame it today in terms of what workplace flexibility means for people who can’t work from a laptop and have had to physically turn up every day. If you’re given a roster change and it means there is no one to care for your three year old, what do you do? At the moment under the Act, you have a right to request. If that request is unreasonably refused, you have nowhere to go. We’re introducing a right for arbitration.
Now, this is rarely a problem in small business. And I know this from the family I grew up in; small business owners are usually the ones doing the rostering themselves. They tend to know their staff pretty well. It’s more common in large businesses where the business itself will have great workplace flexibility policies, but the CEO is not the one doing the rostering and you very reasonably find you have a very junior level of management, often someone who’s done a course but who has never had caring responsibilities themselves, responsible for the roster and requests simply get refused. It leads to someone having to decide, “Do I just give up the shift knowing I’ll then be viewed as unreliable? Do I then have to find another job? Do I then have to go to multiple jobs? Does the juggling of work become harder?” By introducing the arbitration power, the biggest outcome will not how many cases are arbitrated. The biggest outcome will be you’ll get a change in behaviour at conciliation. Management that is currently being unreasonable when there are no consequences will instinctively become more reasonable when there are consequences on the table.
It leads me to gender equity; gender equality will become part of the Act. All the other objectives of the Act will still be there. So, everything that’s already there with respect to taking into account proper minimum standards, work life balance, the objectives there about the national economy, the objectives there about productivity and the particular role of small and medium businesses – all those objectives are still there. But gender equality and job security will be there too as issues the Commission has to take into account.
Similarly, we will get rid of the requirement for there to be a male comparator. This has to happen. It is absurd that early child educators when they get a pay equity case had to compare their work to face the impossible hurdle of comparing how similar their work was to the work of engineers. No wonder they failed. No wonder the case failed. It shouldn’t be the test of fairness as to whether or not we can find a traditional bloke occupation to be able to match it up with. We’ll establish panels within the Fair Work Commission that will deal with pay equity in the care and community sector and pay secrecy clauses will not be valid. If you want to tell somebody how much you are paid, it will be up to you, and that of itself will make a very real difference in so many workplaces.
What the third area of the Bill deals with – and this is where most of the controversy has been – is with respect to bargaining. Let’s be clear here. There is no way of undoing the deliberate design feature of low wage growth without opening up the bargaining system. The Better Off Overall Test needs to be made simpler and fair. The Better Off Overall Test, the way that we’re doing this, is effectively allowing a situation where the agreement could be registered and, if it turns out that there was somebody who, in fact, would not have been better off, than instead of blowing up the whole agreement, even though 90 per cent of the workforce might have voted for it, instead of blowing up the whole agreement, there’s a capacity for it to be amended to cover off on the people who otherwise would have been worse off, that way making sure that we can get – that of itself, I might say, will bring a whole lot of businesses back to the table on bargaining.
We also though are opening up multi employer bargaining. I need to say here multi employer bargaining is not new to the Act. It’s been there for as long as the Act has been there. When people have said this multiple employer bargaining system, it’s too complex. What’s too complex is the current system, which is impenetrable. It is so complex people have given up on using entire sections of it. The low paid stream hasn’t even been attempted to be used since 2014 for the very simple reason that it became impossible for people to access it. So, we’re not reinventing the wheel. We’re taking the three streams that are already there, but we’re opening it up and making it possible for them to be used.
There will be a stream called the cooperative stream. Now, I’d never seen an enterprise agreement until I saw the Kmart one, that was the first one I looked at, and I remember looking at it and thinking back to my Dad’s business and thinking how much simpler it was than the award to have something that was tailor made. But, of course, for small businesses, they’ll never have an HR department. They’ll never have the capacity to jump through all the hoops on a single enterprise agreement. Unless there’s an easy way for them to access multi employer agreements, they just lose out on those productivity benefits. The cooperative scheme provides a capacity for agreements to be made available that small businesses can choose to opt into where the employer agrees, and the workforce agrees.
On the supported stream, we’re making sure, particularly for feminised industries, industries that have never been part of a headline with the word “militant” attached to it, that they shouldn’t be punished for that. And we need to have a pathway for bargaining to work for them as well. It’s something that the care economy is often pointed to, whether it be aged care, whether it be early childhood education or whatever sections that might be, but that’s important for them.
But the single interest stream is essential as well. And I need to defend the single interest stream because some people have suggested, “Why can’t you just take than out? Why can’t we just look after the low paid?”, as though somehow people on middle incomes are rich, as though somehow people on middle incomes aren’t also facing the pressure of inflation and interest rates. Of course, they are. And of course, a decade of depressing wages and keep wages deliberately low has hit people on middle incomes as well. They should not be denied the opportunity to be able to get wages moving. And we need to be able to do this in a way that is simple without absurd levels of red tape.
I’ve had some suggestions put to me on the common interest and public interest test. “Can’t we just add a whole lot of extra conditions, a whole lot of extra words to really flesh out exactly who it’s aimed at?” If we go down that path, we’ll end up where we started with so much red tape that the stream becomes impenetrable. People ask, “Well, who is the single interest stream for?” It’s there for employers that want to bargain together and workplaces where the workers want to be able to bargain together. That’s what it’s there for. And for the Commission to be able to look and say is there enough of a common interest here? Is this one in the public interest? And where they think there is some ambiguity in the act, they do what the Commission always does; they go back to the objects of the Act, which has the principles that I referred to about the impact on the economy, that has the impact on productivity, that already has all the extra concepts that people are saying, “Why don’t you include it?” The Commission will already have regard to those issues and that’s the best way forward.
I’ve been surprised by some people who will argue in every other area of law that goes through the Parliament that we need less red tape. The moment we have got something about getting wages moving, they are giving me a long list of additional items of red tape we could possibly add. That’s not where I want to go. I do want the Fair Work Commission to be able to use its discretion. I want it to be able to make sensible decisions in a common sense jurisdiction. But who would access the single interest test? Let me give you two examples. Sheet metal workers involved in assembling air conditioning systems – their industry rate of pay, the accepted industry rate of pay, is well above the award. Both the employers and the workforce want to be in a situation where they can bargain a multi employer agreement to make sure that they don’t constantly get new competitors undercutting the industry rate in a race to the bottom. They’ve all seen too many times the same people who try to undercut the industry rate in a race to the bottom aren’t just making shortcuts on wages; they’re making shortcuts on safety as well. They see it too many times and they want a system where you can protect against that race to the bottom.
Similarly, with cleaners you often get a situation, you get a company that wants to offer a better deal to its workers. It does so only to be undercut by a new entrant and then they lose their contract, and everyone loses their job and you’re back to where you started on wages. A race to the bottom is no good for low paid workers and it’s no good for people on middle incomes either. If you want to get wages moving, you need to stop the race to the bottom. If you take the single interest stream completely out of the equation, then it’s a licence for the race to the bottom.
And remember this: many times during this debate we’ve spoken about the Victorian early child educators who effectively have been the key example of multi employer bargaining working. They had to go through a really cumbersome process and, ultimately, a lot of red tape pretending they were negotiating individually. Those workplaces now are 16 per cent above the award. They won’t be able to get back into the supported stream. The single interest stream will be their only way to be able to make sure they can continue bargaining from their current base. So, when people say, “Oh, we should just have the single – we shouldn’t have a single interest stream. Just have the low paid, the supported stream, because they’re the only workers we want to help”, not only does it fail to take into account what’s happening around the kitchen tables of middle income earners in Australia, but it also fails to acknowledge what happened after the first bargain where people get themselves above the award. We don’t want to have a situation where we then say, “You’re on a wage freeze now until you fall back down to the minimum.” That’s why the single interest stream needs to be there. That’s why the Government has put it there.
With all of this, we’re making sure the Fair Work Commission has more powers to arbitrate. There are powers that I wish we had already, and I do want to say something about the Svitzer dispute. We have to work right now under the current law. I have said publicly that I wish Svitzer would have had the patience to wait for the new legislation, which would simply be able to allow arbitration where a dispute has become intractable. I think Australians understand that we are a country where we have relatively low rates of industrial action compared to the rest of the world. But what Svitzer are now doing is basically playing a game of blackmail with the Australian economy. It doesn’t just hit their sites. It then hits the ports. It then hits the truck drivers and rail workers who transport goods. It then hits people in the logistics and warehousing sector and finds its way as a problem all the way to empty supermarket shelves. It has an extraordinary impact on the economy.
I welcome the decision of the Fair Work Commission to bring the issue in. I’ve given instructions today for the Australian Government to be represented at the hearings and we will be arguing that the lockout must stop, that the damage to the Australian economy being proposed by Svitzer is completely unacceptable. Can I say I wish the test was the test in our Bill, not the test in the current law.
The test in the current law you have to establish, to be able to take any action for the Commission, that effectively the national economy is at risk or that someone’s life is at risk. An intractable dispute should be able to be dealt with because it’s an intractable dispute. I believe in having an umpire, but can you imagine, to keep the sporting analogy going, if you had any sporting code where for the umpire to blow a whistle both sides would have to come and say, “We’d like you to make a ruling on that one”, because that’s what consent arbitration means. That’s how it works most of the time under Australian law. Imagine on the sporting field if someone behaves badly. Well, they’re never going to ask for arbitration. And that’s where we’re at. We end up with disputes that become never ending and we end up with a situation where if somebody is acting unreasonably, the umpire hasn’t been handed a whistle to blow. The impact of arbitration, like the arbitration I referred to with the flexible work provisions, won’t just be what happens when something is called in. When people know there’s a possibility of arbitration, it changes their behaviour. In the same way as there’s a whole lot of behavioural changes that I want to happen, and I can see over the horizon when this legislation is proclaimed.
So what does the world look like on the other side of this legislation if we make it law? The first thing that will happen won’t be able to multi employer bargaining. The first thing that will happen will be single enterprise agreements will start being made by businesses that have walked away from the bargaining table. They’ll do for two reasons. They’ll do it because the Better Off Overall Test has become workable again and that will bring some businesses back to the table straightaway. But also, there will be some businesses that don’t want to have anything to do with multi employer bargaining and know if you have a single enterprise agreement in place then you’re not affected by multi employer bargaining. So, you’ll get single enterprise agreements going for both those reasons. You’ll find smaller businesses starting to opt in on easier agreements for their workplaces, than having to deal with the complexity of an award.
You’ll also find that low paid workers, who have been cut out of bargaining and therefore cut out of pay increases for too long, start to use the system and start to find their way to better wages. And then you’ll find some of them basically graduate from the supported stream as low wage earners up to the single interest stream as they get their wages moving. And with all of this, it effectively starts to change a moment in time that is still too far away, that as inflation starts to come down, we want to get to that crossover point where wages start to move forward. Wages don’t move automatically.
While I was in Opposition, I watched 55 different wages projections; 52 of them were wrong and every one of the ones that was wrong because it cast too low – because the outcome was too low. The projection wasn’t met. To get wages moving, we need to change the law. To close the gender pay gap, we need to change the law. To deliver job security, we need to change the law. When people say, “Oh, can’t we wait a bit longer?”, I reckon 10 years is enough. I want to get this done.
TINGLE: Thanks, Minister. If I could sort of just reflect on what the world would look like under this legislation, we have had 10 years of another world. We’ve got a great power imbalance, it seems, in a lot of workplaces as a result, and we’ve also obviously seen the decline of union coverage. My question to you is how – if you want to get wages moving again in a workforce where people probably don’t know a lot about their rights. You’ve outlined a few of those scenarios about single enterprise agreements and the incentives to avoid the multi employer schemes for things, but even in a lot of workplaces where they’ve become disassociated with the system for the reasons that you spell out because of the problems of enterprise bargaining, how is it going to be – where are the incentives for people to actually change the agreements? For example, what’s it going to look like in the retail sector that you’ve talked about? How is it going to mechanically happen that people are going to start having different sorts of arrangements between employers and employees?
BURKE: I think retail is one, Laura, where you’ll see fairly quickly some of the larger employers that had seen previous agreements blown up because of the way the Better Off Overall Test was implemented will come back to the bargaining table fairly quickly. I think for bigger employers we’ll see movement there fairly quickly. It’s very much up to the workforces and the employers as to whether they want to opt in for smaller businesses in particular on the cooperative stream, but no doubt some will. And particularly I think you’ll find that for businesses that are very similar, if there’s effectively a model agreement that they can opt into, you’ll see a fair bit of that.
But the other thing that I have to acknowledge is there are some workplaces where no matter what laws you put in place, people get treated worse. One of the things that I deeply respect about the trade union movement is the delegate structure where effectively every day they’re making sure that the laws that already exist are being felt on the ground. And there will be as we saw with the wage theft stories over recent years, there will be some workplaces where no matter what laws we put in place, you get some rogues that are treating people in ways that are completely unacceptable.
The next stage of legislation, what I intend to introduce next year, will deal with wage theft and will deal with a series of those loopholes that we need to close. So, I’m not going to pretend that this looks like getting wages moving for everyone straightaway, but I can picture pretty quickly a whole lot of workers, including the ones who serve us each day when we buy our groceries, there’s a pathway for them to get the wage rises that have been denied from them for a long time. And there will be businesses that have been craving a simpler system that will get one.
That said, everyone between now and the vote and thereafter try to argue to their own advantage. That’s the nature of a democracy. But the Bill in its current form, it gets wages moving and it provides the strongest outcomes for the people with the least bargaining power.
TINGLE: Tom Connell.
TOM CONNELL: Tom Connell from Sky News. Thanks, Minister. You spoke with some passion about increased wages for early childhood educators. I think a lot of parents, myself included, would say they deserve it. We know how vital they are for the economy. Paying for it is the tricky part. Now, aged care workers, Labor said they deserve the pay rise, we’re going to back it no matter what the increase is. For early childhood educators you actually had a policy to increase their wages with government money in 2019 and then dropped it. Why did they drop down the priority list and who will pay for their pay rise? Is it the case of parents now paying?
BURKE: If you have a look at the way we’ve designed, Tom, the supported stream, you’ll see it has a very unusual feature which we haven’t previously dealt with, which is the capacity to bring the funder to the bargaining table. One of the challenges that’s always been there and one of the challenges with that 2019 policy was that if you provided the extra money, to what extent could you even guarantee it would go through as wage increases and to what extent would it simply be taken by some businesses and then they do their own thing on wages? By bringing the funder to the bargaining table, I can’t guarantee what the outcome of those negotiations are and nor should I; that’s the nature of negotiations. But that is a very significant shift. That means, for example, for the funded sectors you described, the Government is the principal funder, they turn up to the negotiations if they’re brought in by the Commission and I suspect, reasonably, they would.
Similarly, you would find there would be situations with the cleaning example I gave in major shopping centres where the funder may be a supermarket a major tenant or something like that or similar in multi office buildings, there may be a particular funder. It’s not only Government that can be brought to the table, but the funder can be brought to the table. That avoids the problem that we’ve had with bargaining to date where effectively you have that the employer might be able to offer a little bit more, sometimes they can if there’s flexibility trade-offs. Let’s not pretend there aren’t benefits for the employer in these sorts of negotiations. There may be something they can provide, but the big question has always been: Can the funder help? They would now be brought to the table and effectively, you know, is the Government willing to operate under the legislation it has brought itself to the Parliament? I think the answer is a pretty obvious yes.
CONNELL: So just so I don’t get in trouble, in one word the Government is essentially still willing to fund the pay increase?
BURKE: I’m not going to answer it in other terms than how I’ve answered it. The one word thing is a nice game but we’ve both been around long enough to know I wasn’t going to bite on that.
TINGLE: Sarah Ison.
SARA ISON: Sarah Ison from The Australian. Thanks for your speech. I just want to focus on David Pocock. Obviously, there’s a heap of focus on this Senator. Will you delay any elements of the Bill if he insists to getting the rest passed? Obviously, David has said there’s heaps of good stuff about this Bill. He wants it passed. Will you delay any of it at all? And if I can, just a second one, we did hear from Qantas that for the Qantas Group this Bill will mean certainly less flying because costs will rise, demand will be destroyed, particularly on marginal routes. What’s your response to this concern that we’re going to have those flights shut off?
BURKE: Thanks, Sarah. First of all, with respect Senator Pocock, as I said in the speech, I’m conducting good faith conversations with the crossbench, including Senator Pocock, and so I’m not going to speak out of school in those conversations. But I will tell you my preference. My preference is the Bill in its current form. I acknowledge there will be negotiations. I’d much sooner be in a position where we were tweaking individual sections than removing entire sections of the Bill.
How the negotiation goes, you’ll see when you get to the end of the story. If I put it in these terms. I can’t think of a section of the Australian economy particularly where people are on low to middle incomes where I’d say, “Oh, we don’t need to get your wages moving.” I and really don’t want to be in a situation where we’re taking complete sections out of the Bill. But that’s a conversation we’ll continue to have and, hopefully, today I’ve helped make some of the case. I suspect members of the crossbench might be listening a little bit I don’t know.
ISON: And on Qantas?
BURKE: Sorry, I wrote that down. With respect to Qantas, look, Qantas is one of the companies – we generally with the consultation process, we engage through peak bodies. Qantas is one of the companies that we actually brought in for direct negotiation. I have to say the Qantas position was don’t change a single law, and that was never an option for the Government. I don’t accept the argument that if you do anything to get wages moving for a company like Qantas, that somehow everything is in jeopardy. There will always be some big words, and I referred to various scare campaigns at the start of the speech, and various words of crisis will be used. But in fairness, if you look at the current laws, it’s hard to find many companies that have had more different ways of working around the current laws than Qantas has. I’ll put it in those terms.
ISON: Can you rule out marginal flight routes will not be shut down as Qantas says? Is that completely not going to happen? Can you rule out that that is not going to happen?
BURKE: I’m not on the board of Qantas and I’m not making the decisions and I’m not seeking to be on the board of Qantas. If they want to make decisions about their flights, they will make decisions about their flights. But if they want to pretend that it was because we wanted to get wages moving, I don’t think that would be an entirely accurate line of reasoning.
TINGLE: Ron Mizen.
MIZEN: Thank you, Minister. Ron Mizen from the Australian Financial Review. You just mentioned in your answer then that there will be various words of crisis used. One of those –
BURKE: Michaelia will win but yeah.
MIZEN: One of the crises that was put forward in recent days was actually from the ACTU secretary Sally McManus, who suggested a profit crisis and that obviously workers had been sort of dudded because increased profits weren’t flowing through to wages. Do you accept that proposition? But more specifically, if you put mining aside for one moment, the RBA Deputy Governor Michelle Bullock suggested they’d been making extraordinary profits separate to the rest of the economy. Do you think that wages and profits as a share of the economy are dislocated and is that part of what you’re trying to fix?
BURKE: I don’t start by blaming business. I start by blaming the previous government. Business will work within the framework they have and within that framework what business will do they’ll try to minimise all their various forms of cost and one of them will be their wages budget. That will be one of the things they do. They were given a system by the previous government where any time a loophole appeared; it was allowed to be there. The government had many opportunities – the previous government – to be able to get wages moving, to be able to close loopholes, to turn up and use the processes of the Commission to argue for wage rises and they never did any of them. Business have operated within that framework and so the quotes that you give to level the aim at businesses, I level it quite squarely at the previous government. There is a way of changing operation here.
And I’m also conscious that for business, if you’re in a situation where if you try to do better, you’re going to be undercut in a race to the bottom, well, that becomes a judgement call for the individual business. This Bill is aimed to stop the constant race to the bottom. We’re providing a framework that allows good businesses to be able to deliver a better deal for their workforce and not compete in a race to the bottom with their competitors on wages. They’ll still compete. They’ll compete on everything else. They’ll compete on quality, they’ll compete on systems, they’ll compete on brand recognition. They’ll compete in a whole lot of other ways. I don’t see why a race to the bottom on wages should be part of that competition on an ongoing basis.
TINGLE: Andrew Probyn.
ANDREW PROBYN: Minister, Andrew Probyn from the ABC. You said that you wanted to explain what problems you need to fix. Can I just test that theory? Under a current example – a current example, if an employer is dealing with a group of workers and they’re represented by two unions, if the unions are in dispute but a majority of workers agree to take an EBA, they can have a vote and it goes off to the Commission. As I understand it, you are proposing a situation where, for example, a university is dealing with the NTEU and the CPSU. One of them – say one of those unions doesn’t agree, but that’s the smaller union in so as far as it’s got fewer members, so the majority agrees to take, to accept, the offer, but because your legislation requires written agreement from both, there’s no vote, it goes to the Commission. Now, what is the problem you’re trying to fix if the smaller union has the effective power of veto over the majority workers?
BURKE: The thing that we’re – and I’m really grateful you’ve raised it, Andrew. I’m conscious that these areas of multi employer bargaining have effectively been largely locked up for people to be able to access them. And I am being cautious as we open these up. There are two effective elements of that caution. The first is the one you’ve described in terms of before things going out to a vote making sure that the employee organisations that have been part of the negotiation agree to it going to a vote. The other part of it is the exclusion effectively covered by the construction division of the CFMEU. They’re the two exclusions where I’m showing a degree of caution and it’s to make sure that we avoid two problems. One, in construction, I just don’t feel that part of the industry has the maturity right now to be – where I’m willing to risk opening up this in this way. They’re not losing rights in terms of what they currently have but in terms of the opening up of this I’m just cautious.
The second part of it, though, I’m also cautious with multi employer bargaining that we could end up in a situation where you could have some very fast movers of some employers using a consultant, not wanting to use employee organisations. I’m very cautious about having agreements go through where pressure is put on employees and effectively, we’re getting substandard agreements. The outcome of that, the whole thing was set up to get wages moving and substandard agreements go out and we don’t get wages moving. I’m very wary of that. So that is why I am being more cautious.
PROBYN: The corollary of your caution is that you don’t just the NTEU, the CPSU, because you don’t trust the CFMEU.
BURKE: The situation of caution goes both – also goes to how there will be some rogue employers as well. You can do your wish list of who I don’t trust, but I think the reality here –
JOURNALIST: I’m asking –
BURKE: No, I respect that. You’re asking a question but you’re doing it in a pointed way, and I’m just explaining to you that as we open up something that affects the workforce in a new way – not in a new way in the intention of the Act because multi employer bargaining was always meant to happen, but a new way in terms of the economy because multi employer bargaining so badly failed under design of the Fair Work Act, that I’m making sure we don’t have the risk of disruptions in sections of the economy where I am concerned about the maturity of the relationships there, and also to make sure that we don’t end up with substandard agreements going out.
TINGLE: Rachel Baxter.
RACHEL BAXTER: Rachel Baxter, Seven Network. Thank you for your speech. You’ve labelled a lot of these concerns over multi employer bargaining as scare campaigns. If I could just bring you back to Qantas. So, my Dad is a Qantas pilot and I’ve seen firsthand the personal stress that these workers have gone through, particularly during the pandemic with strikes and job losses. What do you say to workers like my Dad who are concerned about the bargaining aspect of these reforms and the possibility that we have been hearing from so many industries that this will lead to strikes and job losses?
BURKE: Well, first of all, don’t know your Dad, but very grateful to the work that anyone in that sector does, particularly the pilots. If there’s a high pressure job in Australia, that’s certainly one of them.
The issue of strikes, I think we just need to remember this: the rules to allow industrial action in a multi employer bargain are identical to if it were a single employer bargain. Identical. So, if I’m negotiating with the National Press Club and I want to have industrial action against the National Press Club, then if I’m wanting to do that and it’s a direct negotiation, then if a majority of the workforce vote for it, then protected action is allowed to happen. If the negotiation is happening between here and I don’t know the Canberra Labor Club or a couple of other clubs that are around and the negotiation is happening on a multi employer basis, if the workforce here doesn’t vote for industrial action, it can’t happen. If they do, it can.
It’s the exact same rule. There is absolutely nothing that makes it easier to have industrial action under a multi employer bargain than it would be if it were a single employer bargain. So, what I say to those who say this is too much, well, what they’re actually calling for is a wind back on the on the provisions that have been in the act ever since it was put there that for the nine, 10 years of the previous government they never sought to touch.
JOURNALIST: I think what they’re calling for is not to be stuck in a situation that they don’t want to be in.
BURKE: That’s why they get to vote. If they voted no, the answer would be no. If they voted yes, then the answer would be yes.
PAUL KARP: Paul Karp from the Guardian Australia. Thanks very much, Minister. The New South Wales Government has asked you to refer the Sydney Trains industrial dispute to the Fair Work Commission. Will you intervene in that dispute? And does it follow from your comments about arbitration of intractable disputes changing the bargaining dynamic that in industries that have strong unions at the moment like the RTBU and the MUA, it’s possible that some workers might get less under your Bill because militant unions will have to moderate their demands to not end up in the Commission?
BURKE: Okay. I’ll deal with the last point first, Paul, which is I can’t be in the world of prejudging how the Commission will conduct arbitration. I believe in having an independent umpire and I think it’s really unhealthy for the Minister of the day to be going over the top and saying, “This is how I expect you to use your independent powers.” And, you know, it’s not like a majority of the Commission is appointed by me. We’re down to the point now of the 40 something Commissioners there’s only 11 who had their work prior representing the employees’ side of the bargaining table. So, how the Commission deals with arbitration, I want them to be practical. I want them to be commonsense, but I don’t want me to be telling them what to do.
With respect to the letter from Damien Tudehope, your timing is impeccable. Just before I came here, I wrote my letter back. So, the Minister has asked me to use my powers to terminate industrial action. They are powers that have never been used by a Minister in the history of the Act. It’s always viewed as an absolute last resort and all Ministers, including me, have had a view that the correct way to deal with these issues is let the umpire make the decision as is happening to the tugboat operator, Svitzer, today. So, that’s my preference.
I have in the letter also reminded Minister Tudehope that there is a particular power under the Fair Work Act for State Ministers to make this exact case before the industrial – before the Fair Work Commission, and I’ve encouraged him to do so.
KARP: So, you won’t; he should.
BURKE: I beg your pardon?
KARP: So, you won’t intervene because he should refer it there.
BURKE: Well, also the economic impact about the, you know, the Svitzer dispute, for example, it’s been started by the Commission in terms of calling it in, not by me and I think that’s appropriate way for it to happen. But we will turn up and argue because it’s a case of the impact on the entire national economy, and the Australian Government is the organisation best fit to make that case.
With respect to the New South Wales and the train dispute, the New South Wales Government have the best information on the impact of that. It’s appropriate for the New South Wales Government to make that case to the Commission. I’m not going to prejudge it.
TINGLE: Catie McLeod.
CATIE McLEOD: Thanks, Minister, for your speech. The Prime Minister declared before the federal election there was no one on either side of politics in Parliament with closer ties to the business community than him. There’s been a lot of criticism of your industrial relations reform from employer groups and the business lobby, which you deflected some of yesterday by saying there will always be businesses coming out saying they prefer not to pay more for higher wages. Have your industrial relations reforms damaged Labor’s relationship with the business community and how will you manage this going forward? And is it still true that there’s no one in Parliament with closer ties to the business community than Anthony Albanese?
BURKE: To the last point, yes. To the rest, engagement and consultation doesn’t mean universal agreement nor should it. If you talk to most of the business organisations, you’ll be hard pressed to find many that won’t acknowledge that while there are aspects of this legislation that they don’t like, it’s also the case that the quality of engagement from the Government is higher than they’ve seen in a very, very long time – a very long time. I’ve seen the various photos coming from the Prime Minister’s trip overseas. The business delegation that is there is a big part of this Government wanting to make sure that business does well. But you will always expect a Labor Government to have a better interest than a Coalition Government in getting wages moving. I don’t think that’s a surprise to anyone.
And don’t forget there are parts of this Bill that business desperately wants. The changes to the Better Off Overall Test are there very much at the long request of business. The previous government’s attempt to deal with the Better Off Overall Test was to introduce legislation and then just suspend it for two years, allowing workers to be worse off and allowing wages to go backwards. So, the engagement with business – I don’t think business expect themselves to be writing the legislation. I do think they expect engagement. I do think they expect to be respected in discussions and for each idea that they come forward with to be dealt with seriously and sensibly. The 150 amendments that I moved in the House of Representatives were because of – some of them as a result of the consultations with the ACTU, but the lion’s share of them a direct result of serious consultation and engagement with the business groups and they know that.
McLEOD: It sounds like there’s still quite a lot of the Bill that business groups aren’t happy with, so do you think there is any risk that the relationship will be damaged?
BURKE: I don’t believe so. I don’t believe so. I don’t believe business would expect that they get to write the legislation, but, obviously, the engagement will continue in earnest. We’ll continue our conversations with business, but I think we’re about to hit the point where the really intense conversations happening with the Senate crossbench, and at that point it’s not for me to speak on their behalf.
McLEOD: Thank you.
TINGLE: Stela Todorovic.
STELLA TODOROVIC: Stela Todorovic, Network 10. Thanks for your speech, Minister. I’m just going to switch gears a little bit. Donald Trump announced he will be running for President in 2024. Do you welcome his candidacy?
BURKE: I had no idea that this had happened, but I will leave it for the Prime Minister or the Foreign Minister to be the first people to comment.
TODOROVIC: Given the Capitol riots, do you think it’s appropriate?
BURKE: I’ve given the only answer I’m going to give, Stela.
LAURA TINGLE: Nic Stuart.
NIC STUART: You just gave a brilliant extemporaneous speech – look, mum, no notes! – and it all hung together. You’re playing with these ideas in your mind. You can quite easily, if you want to, isolate part of the legislation and hold it. You can just cut it off and go through with the other ideas. You’re clever enough to do that. Why don’t you either go into the negotiations saying, “That’s a possibility. I’m prepared to consider doing that”, or alternatively look at giving people like, for example, the crossbenchers in the lower house who might have voted against this legislation, give them the stuff so that they can actually recognise that your answers are right and so that they know that you’re doing the right thing? Why don’t you do one or the other of those?
BURKE: I’ll deal with the first one; the second one beyond my gift. But in terms of the first issue, I want to get wages moving. I really do. The main area that you could carve off, for example, to do the sort of possibility that you’ve just described, I’m really reluctant to go there because the main area would be to take out the single interest stream. What does that mean? It means that once you’ve – even people who are low paid, once they’ve had their first agreement, they effectively get a wage freeze until they’re low paid again because they’ve got nowhere else to go. It means for industries like the sheet metal example I gave where the race to the bottom continues, and they have to no pathway out of it. It also means the incentive that will get single enterprise agreements moving is removed because those companies say we want to fit into the supported stream, our workers aren’t low paid, so we don’t have to bargain at all. If we were to end up in that world, we would end up in a world there where there are a very a large number of Australians where wages remain stagnant, and if I can avoid that, I intend to.
STUART: But that will only be until we finally get it going again. Surely people will be convinced by your brilliant argument.
BURKE: Everything is until we get it going again. For 10 years it’s been until we get it going again. I want to get it going again. Every wait, every delay, does hurt.
TINGLE: Ashley Wick.
ASHLEY WICK: Thanks, Minister. Ashley Wick from Nine News. Can I get your reaction to today’s wage data that shows wages are still going backwards in real terms and, secondly, if I may, can you guarantee that your IR reforms will lead to wages at least keeping up with inflation, and when can workers expect to see that filtering through to pay pacts?
BURKE: I can guarantee our changes will put upward pressure on wages. How quickly they do that depends on how quickly people engage, depends on us getting the legislation through. The point at which you get the crossover, there’s a whole lot of international factors that we’re in the hands of there in terms in particular of what’s happening with international energy prices, which is one of the main – not the only driver but a very significant driver on inflation.
In terms of the figures that have come out today, it is a better figure than we’ve had for a long time and it’s a better figure largely driven by the fact that the Government did what we said we would do – turned up to the Fair Work Commission and argued for pay rises. That’s a big part of what’s happening at the moment. So, I welcome that wages are starting to move but they’re not going to get into the sorts of numbers that Australians need unless we can get bargaining moving, and that’s entirely contingent on whether we can get this legislation through.
WICK: Thank you.
TINGLE: Ron Mizen has a question on a breaking story.
BURKE: What’s just happened?
MIZEN: The barrister representing you in the Svitzer hearing has just told the hearing that he hasn’t received instructions as to whether he should seek a termination or a suspension or push or argue either way. I wonder if you can clarify what exactly the government’s instructions to that barrister are for that hearing and whether the government is supporting a suspension or termination which would then push those parties into arbitration as we saw with the Qantas dispute a few years back.
BURKE: I won’t go into detail as to what you’ve said because obviously you have something right now in terms of a quote that I don’t have in front of me, so you respect that. But what I will say is this. We are making clear the potential damage to the Australian economy of this dispute. What Svitzer are attempting to do is economic vandalism. Now, some will argue, “Oh, well, the current law gives them no other choice.” If they waited three weeks, I intend to give them a new law. They have decided to act now in a way that puts a whole lot of the Australian economy at risk, not simply their own workplace. The full impact of that I wanted to make sure was made clear to the Commission. I support the Commission bringing this in. I don’t want to do anything that interferes with the independence of their decision, but it’s completely the proper role of the Australian Government to make clear how irresponsible and dangerous this lockout it. Is.
MIZEN: So, just to clarify –
BURKE: That’s all I’m going to give, Ron.
TINGLE: If I could ask just one final question, we’ve got two weeks of parliamentary sittings; people have been complaining it’s a bit of a rush. How much scope is there to give the Senate an extra week to consider the legislation before Christmas?
BURKE: Obviously, as Leader of the House, I’m terribly wary of ever telling the Senate what to do and doing so would get not only a reaction from the Senate crossbench; I suspect I’d get a reaction from both Katy Gallagher and Penny Wong. I know the issue of additional sitting days within the Senate is something being discussed among the Senate. I don’t believe that that issue has landed yet. If it does, then at that point we will look at how we schedule the House of Representatives to be able to consider messages from the Senate, because it will have an impact on us. But those issues – whereas with the House of Representatives it’s entirely a decision of Government. If the Prime Minister says to the Speaker I need Parliament, we get Parliament, whereas with the Senate you need a majority of the Senate to be able to agree. It’s a different system. I know that conversations are happening. I want to be able to do everything I can to give comfort to the Senators that they feel they’ve had time to be able to work through the legislation, but I’m also impatient to get it through because I know that you don’t get a pay rise the next day when this leg goes through. There’s a lag and the fact that there’s a lag – some people say that means we may as well wait until next year. No, no, no. It makes it even more urgent because if people are facing the sorts of pressures, we know they’re facing now, we have to do everything we can to be able to get their wages moving soon. And so, if that involves additional sittings, I’m certainly supportive of it, but I’ll leave it to the Senate.
TINGLE: Please thank Tony Burke.