Ai Group PIR Conference 2025

I want to acknowledge the Ngunnawal people, the Traditional Owners and Custodians of where we meet today and their continuing connection to land, waters and community.

I extend that respect to Elders past and present, and any Aboriginal and/or Torres Strait Islander Peoples here tonight. 

Thanks for the opportunity to speak with you all this evening.

We talk regularly through a variety of formal consultation mechanisms, but it’s nice to see you all in a slightly more relaxed environment.

I would like to acknowledge up front the team at AI Group, and Innes Willox and Brent Ferguson in particular, for their long-standing engagement in and highly valued contribution to the public policy debate in this country, particularly in the critical areas in my portfolio - workplace relations, skills, and employment.

I would also like to recognise the quality of technical expertise AI Group brings to the table on behalf of employers – it is second to none.

I greatly appreciate AI Group’s constructive approach – we may not always agree but the conversation is always a respectful one. And it’s a smart approach because it delivers real outcomes for AI Group members.

Tonight, I’d like to speak about our agenda - about why our government believes co-operative and fairer workplaces benefit workers and employers alike.

When it comes to workplace relations, I firmly believe that the way to achieve our shared aims of fair, safe and productive workplaces is through constructive dialogue – I’m talking about dialogue directly between employers, workers and their unions, as well as dialogue involving government through tripartite forums like the National Workplace Relations Consultative Council (NWRCC) and National Construction Industry Forum (NCIF).

I want to see this type of constructive dialogue increase and focus on how employers and employees can work smarter, grow businesses and the economy, and make sure that everyone gets a fair share of that growth through better wages.

Through our Productivity, Education and Training Fund grant program, we are aiming to strengthen tripartism and constructive social dialogue in the Australian workplace relations system by backing in and supporting key employer organisations like Ai Group, as well as unions.

As we all well know in this room, workplace relations can occasionally be a contested policy area so I won’t stand up here tonight and pretend we will always agree on everything. But constructive dialogue doesn’t require us to agree on everything. It requires us to come to the table in good faith, with an open mind, and a willingness to listen and share ideas.

As was demonstrated at the recent economic reform roundtable, the goodwill is certainly there to work our way through difficult issues and find consensus where we can.

I don’t need to reiterate to this audience that our first term workplace relations changes were the most significant since the Fair Work Act was established 16 years ago.

After a decade of wage suppression and lack of stewardship of the labour market by the former Coalition government, these changes were long overdue.

Our changes were designed to get wages moving, reinvigorate bargaining, improve job security and safety, close the gender pay gap, and remove loopholes in the system that undermined fairness – for both workers and employers.

Importantly, our changes were also aimed at boosting the constructive dialogue I just mentioned between workers and their unions, employers, and government. 

The key point I make tonight and everywhere I go is that, yes, these reforms are good for workers – absolutely and as a Labor government we are proud of that – but they are also good for businesses.

I am motivated by the strong belief that a race to the bottom on wages and conditions benefits no one – not employers, not workers, not industry and not the nation. And it certainly doesn’t improve productivity.

When workers can see they are being paid fairly, their wages are growing in real terms, their job is safe and secure, their work is valued, they have some control over their working lives and how they balance work with their lives outside of work, and they are consulted on changes that will affect them – then they are more engaged, more motivated and more committed, resulting in a workforce which is more secure and more stable for employers.

For example, in May this year, the Australian HR Institute’s report showed most employers surveyed (58 per cent) said the right to disconnect had improved employee engagement and productivity.

The independent review of our paid family and domestic violence leave provisions found that of the surveyed workers who had taken paid FDV leave, 91 per cent said the leave helped them maintain their income, and 89 per cent said it helped them to retain their employment – good for the worker who retains their income, and good for the employer, who retains a valued staff member.

As is well known, our ‘closing the labour hire loophole’ reforms have delivered pay increases for about 5,000 labour hire workers to date. But they have also levelled the playing field for employers, by preventing the undercutting of enterprise agreements through labour hire. The reforms have also had the effect of increasing direct employment, helping to provide a more secure and stable workforce.

Our changes in relation to casuals have simplified the process for employees to apply for conversion (if they want it) and have reduced notification obligations and red tape on employers.

The final report from the Secure Jobs Better Pay Review has now been published, finding overall that our reforms are “... achieving the Australian Government’s intent, operating appropriately and effectively and with minimal unintended consequences”. The report makes 21 recommendations aimed at further improving the framework, which are currently under consideration.

These early signs show that our first term reforms are starting to level the playing field for the vast majority of responsible employers doing the right thing, who for a decade were undercut by a minority of unscrupulous employers exploiting loopholes that were left unaddressed by the former Coalition government.

The rejuvenation of the bargaining system is one of the impacts of our changes that I am most proud of.

Our reforms have brought parties back to the bargaining table - some of whom have not bargained for many years, and some of whom are bargaining for the first time.

The number of Australians covered by enterprise agreements now sits at almost 2.7 million, the highest recorded since bargaining first began in 1991.

This is good for workers and good for business.

As the independent review of the Secure Jobs Better Pay reforms observed, the very process of bargaining itself can have a positive impact on productivity, because it builds that constructive social dialogue that I’ve been talking about - it gets the parties together, developing constructive relationships, identifying common ground and establishing trust.

From there, mutually beneficial bargaining outcomes can be negotiated, whether that be flexible work options, skill development opportunities, more productive work practices, or better wages.

Our bargaining reforms have also had the important effect of extending the benefits of bargaining to lower paid sectors which have historically not been able to access it.

The new supported bargaining stream has for example allowed early childhood educators to secure a pay increase of 15% over two years.

This is a fantastic and long overdue pay increase for those workers and their families, but importantly the increase is also having an early positive impact in helping employers attract and retain workers in this critical sector - workforce issues that must be addressed to support the government’s ambition for a truly universal, affordable early childhood education and care system.

We know that affordable, accessible care is crucial to help ensure that parents - particularly mothers - can participate in paid work. That’s why we’re proud to say that women’s workforce participation is now at a record high, with 63.5% of women either in work or actively looking for work.  Unlocking women's participation has helped to alleviate labour shortages, which good for workers, and good for business.

We’ve increased paid parental leave from 18-26 weeks, ensuring that women at that critical time of giving birth, remain connected to their workplace and indeed return to work – as well as incentivising shared care. We have also introduced a 12% superannuation contribution on government Paid Parental Leave, helping women boost their retirement savings.

Despite some very dire predictions from Liberal and National parties (that our workplace relations legislation would “close down Australia”) the Australian labour market has in fact performed strongly since our reforms commenced:

The number of Australians in work has risen by more than 1.1 million (or 8.6%) since May 2022 – this is a higher rate of employment growth than any major advanced economy

During the financial year 2024-25, Australians started 437,150 new businesses, higher than in both 2022-23 and 2023-24.

There are 7.3% more small businesses than in 2022.

The rate of industrial disputation remains low.

Wages are moving – the June quarter 2025 marked the seventh consecutive quarter of annual real wages growth.

The gender pay gap is at its equal lowest level on record, and Australian women working full-time are now earning more than $250 a week (nearly 16%) more on average than they were before we came to government.

All of this against the background of an unemployment rate of 4.2% in July 2025, remaining low by historical standards.

We of course absolutely acknowledge that some Australian workers and businesses are still doing it tough, but these early positive signs are certainly encouraging.

We made a commitment at one of our first Cabinet meetings after the election to put productivity at the very core of our second term agenda. We demonstrated our commitment and intent at last month’s Economic Roundtable and there will be more to come on this agenda as the term unfolds. 

As we start our second term, our focus is on the delivery of our election commitments and ensuring our first-term reforms are working effectively. From December this year, a statutory review of our Closing Loopholes reforms will commence.

We want to continue to work with employers, workers and their unions through tripartite structures across the portfolio to increase constructive dialogue and build cooperative workplaces and a prosperous, productive economy for all Australians.

The construction industry remains at the forefront of my mind in terms of second term priorities. I don’t need to reiterate to this audience how critical the construction industry is to the Australian economy and the delivery of many of our election commitments, including increasing social and affordable housing supply, energy reform and major infrastructure development.

We are working hard to address the deeply embedded structural and cultural problems that are impacting this critical industry.

Whereas the former Coalition government manifestly failed to deal effectively with these issues, we have taken the strongest action available to stamp out corruption, criminality and violence from the Construction and General Division of the CFMEU by placing it into administration.   

On 18 June 2025, the High Court dismissed a challenge to the constitutional validity of our legislation, allowing the Administration to move to its next phase.

I tabled the second biannual report of the CFMEU’s independent administrator, Mark Irving KC, in Parliament today. And it shows clearly the significant progress he is making, including:

Removing or accepting resignations of over 60 staff, over two-thirds of whom were in leadership positions or organisers. In NSW, in excess of 75% of organisers have been replaced since August 2024. In Queensland and SA that number is about 50%.

Developing a new Statement of Expectations for all staff, a National Code of Conduct, an EBA Policy, an Organised Crime Policy, an Industrial Mediators Policy, and a Gift Policy, in addition to the existing policy regarding menacing behaviour.

Establishing a National Steering Committee and publishing a Strategic Plan for 2025-2028, focused on ensuing the union operates democratically, lawfully, and effectively in the best interests of its members. 

Appointing Dr John Falzon, former CEO of St Vincent de Paul, to head a new Union Education and Development Unit within the CFMEU which will deliver ongoing education and training aimed at changing the culture of the organisation, including on ethics, integrity, and eliminating corruption.

Investing $5.4m over 5 years to address gender inequality and sexual harassment, including changing the behaviour of men towards women in the industry, and establishing a women’s committee to guide those efforts.

What Mr Irving has achieved in 12 short months is extraordinary. We will continue to support the Administrator’s vital work until the job is done. We will not be distracted by efforts to undermine the Administration by those associated with the former leadership, or others with their own agendas. We will continue to be guided by industry stakeholders who know what needs to be done on the ground to deliver real change.

It is clear that the problems in construction are wider than just the union, and we need employers to step up and do their part too.

As well as dealing with the immediate challenges in this industry, we are also looking to the future and how we can support long-term change. Through the tripartite National Construction Industry Forum, we have built an unprecedented level of trust between business, unions and government stakeholders, who for the first time are engaging in a collaborative rather than adversarial manner to address systemic problems in the sector.

The NCIF’s draft ‘Blueprint for the Future’ sets out 44 advisory recommendations that are practical, sustainable and owned by the construction industry. We are working towards formal endorsement of the Blueprint at the next meeting of the NCIF in September, which will kick off a long−term reform process for the industry. There will be opportunities for involvement in this process not only for NCIF members but other interested organisations as well, including Ai Group.

On the issue of penalty rates, I understand there will be some differences of view in the room tonight about whether our protection was needed.

I would like to re-emphasise a few key points:

Existing award arrangements will not be overridden by this Bill. Following advocacy from AI Group, we amended the Bill in the House to further clarify this point.

Employers and unions have a longstanding right to be able to apply to vary awards in line with the law of the day. The fact that we haven’t changed this fundamental feature of our award system doesn’t make the Bill retrospective in its operation.

Employees who have existing rolled-up rates under awards or agreements will continue to be paid those rates after this Bill commences.

Employers will still be able to apply to the Fair Work Commission to vary awards to include exemption rates and rolled-up rates that comply with the new principle.

We have not amended s 139(1)(f), which means annualised wage arrangements will still be permitted under awards.

Importantly - this Bill does not impose any new obligations on employers.

Having said all that, I wish to reassure you that we will monitor the operation and implementation of this reform by the Fair Work Commission in the usual way.

Another election commitment that we gave is not likely to affect many people, but for those it does, the impact will be profound. We will amend the Fair Work Act to clarify that employees dealing with stillbirth and early infant death can continue to access their existing employer-paid parental leave.

This will provide employers with greater clarity in situations where a parent has experienced the tragedy of stillbirth or early infant death.

In workplaces without explicit entitlements addressing this situation, the legal position is currently unclear.

That’s not fair on employers or on grieving parents.

Employers who have specific provisions dealing with stillbirth and early infant death will not be affected by this reform.

We also made an election commitment to ban non-compete clauses for workers earning less than the high‑income threshold in the Fair Work Act (currently $175,000).

A commitment was made to consult on policy details, and a Treasury paper on the proposed non-compete reforms is currently out for consultation.

I’m aware that there will be important feedback from this group on this issue, and I encourage you to participate in the consultation process being run by the Treasurer.

An important tripartite body that brings governments, unions and employers together to improve health and safety at work is Safe Work Australia. Safe Work Australia is currently conducting a Best Practice Review of our Work Health and Safety laws, with a final report expected in mid-2026. I encourage you all to participate in this important process.

A key issue under consideration will be the management of psychosocial hazards and the promotion of mentally healthy workplaces. On this complex issue we all have a role to play – government, employers, and workers and their unions.

The policy area of work health and safety never stands still.

Different jurisdictions have made changes over time that can diverge.

I am resolved to advancing harmonisation while ensuring we continue to make workplaces as safe as they can be.

It is vital we continue to be ambitious, and we collectively pursue best practice in a harmonised way.

Before closing, I would like to mention the importance of ensuring that all Australians enjoy the benefits of having a rewarding and productive job.

A report from the Ai Group’s Centre for Education and Training late last year revealed that nearly 90% of Australian businesses are suffering poor productivity due to poor worker foundation skills. We agree that our skills and training system is missing a key building block.

These are skills that give people access to an education system and provide opportunities to develop careers and engage in life-long learning.

Under the National Skills Agreement, $142 million has been allocated to improve foundation skills training capacity, quality, and accessibility.

To support this, the Australian and state and territory governments have developed a 10-year National Foundation Skills Strategy which sets out an agreed direction to ensure we work together to enable people to have the underpinning skills they need to contribute to the workplace.

Programs like our expanded Skills for Education and Employment program recognise we need a broader approach to building foundation skills for people beyond registered jobseekers, like Kerri from Noarlunga in my electorate.

Kerry joined the SEE Program with the goal of enhancing her computer skills. She wanted to master essential tasks such as navigating websites, sending emails, conducting online research and using basic word processing programs. Kerri improved her digital confidence and indeed discovered her previously untapped and excellent typing skills.

Or Milad, who undertook a work placement through the SEE program to gain valuable hands-on experience of the Australian workplace environment, helping him build his professional networks and skills. When Milad completed his study with SEE, he successfully landed a job.

Last month in my home state of South Australia, the Australian and state governments announced joint funding of $14 million to deliver up to 12,000 training places in foundation skills across 2027-28. In addition to improving our skills system, I want to see a fit for purpose Employment Services system that provides job seekers with tailored support to get them into a job but also is responsive to industry and business needs. This was the principle I applied in reshaping what will become the new Inclusive Employment Australia Program.

In closing, I want to boost constructive social dialogue and tripartism to address the issues that matter to all of us – safety, fairness and productivity - whether at the national, industry or workplace level - resolving differences, finding common ground and moving forward together.

I look forward to continuing to work closely with Ai Group and its members throughout my term as Minister for Employment and Workplace Relations.

Thank you and enjoy the evening. 

ENDS