Interview with Patricia Karvelas - ABC Radio National
E&OE Transcript
PATRICIA KARVELAS, HOST: Labor is close to securing a deal with the Coalition on its legislation to force the CFMEU into administration. It could pass as early as today after concerns the saga could drag out until next month at a time where Labor needs to be seen to be taking action to clean up the construction union, like it promised it would. Workplace Relations Minister, Murray Watt, is our guest. Welcome to the program, Minister.
MURRAY WATT, MINISTER FOR EMPLOYMENT AND WORKPLACE RELATIONS: Good morning, Patricia, how are you?
PATRICIA KARVELAS: I'm good. Just how close are you to securing a deal with the Coalition? Will the legislation pass today?
MURRAY WATT: Well, today is D-Day for passing this bill, which would enable the construction division of the CFMEU to be put into administration. There's really no time for delay. We do feel that we're getting close to a deal with the Coalition on this. Of course there's certain things that we're not prepared to agree to, but I hope that they see reason.
Equally, I have been in discussions with the Greens, and I would certainly hope that they can get on board this legislation as well. When it comes to the Coalition, I mean, Michaelia Cash has been out there for years demanding action on the CFMEU, and just yesterday, she said in the media that she thinks that this legislation needs to be passed today. Well, she has an opportunity to do that. If the Coalition vote with us today, this bill will pass, and that can be a critical step towards reforming the construction union, so that it returns to focusing on the best interests of its members.
PATRICIA KARVELAS: We're going to revisit the Greens points you made in a moment, but just digging in to the negotiations with the Coalition, there are some sticking points. Firstly, the Coalition wants the union’s State and Territory branches to be placed under administration for a minimum of three years rather than a maximum. Is that on the cards, are you willing to move on that?
MURRAY WATT: We've told the Opposition that we don't support that. The reality is that there are different levels of severity of allegations across different branches, and they need to be treated separately. What we have said is that the administration would go for a period of three years in total, but also with the power for the administrator to release particular branches from administration, essentially, if they get a clean bill of health once someone's had a good look at them.
But the issue is that if we make every single branch stay in for three years, that will divert resources away from the problem areas towards divisions and branches which have been found to be fine. Administration is a costly exercise. We want to make sure that those resources are focused where the biggest need is.
Having said that, under our scheme, every branch, every State and Territory branch of the construction division will go into administration at the outset, and then it would be up to the administrator to work out where the most significant problems are, rather than spreading their resources thinly across all of them for three years when it may not be necessary in all cases.
PATRICIA KARVELAS: OK, so you're not in favour of that minimum demand that Michaelia Cash and the Coalition are making, but why not for Victoria? Shouldn't they at least have this minimum period?
MURRAY WATT: Well, I think that that's a matter best left to the administrator once he or she has had a good look at exactly what is going on. I think it's reasonable to expect that the Victorian branch in particular, but potentially other branches as well, would be looking at an administration period of three years. But it may well be the case, once the administrator has had a look, that they find that the issues aren't as serious, that there isn't corruption, that there isn't criminality. If they do find that, then I think it's a good idea for them to have the capacity to let certain branches out of administration, so that they can focus on the worst branches, and that's got to include Victoria.
PATRICIA KARVELAS: OK. Senator Michaelia Cash wants barrister, Mark Irving KC, the administrator, to issue progress reports to Parliament every three months, and to appear before a Committee. Will you agree to that?
MURRAY WATT: We're certainly open to the idea of some kind of reporting to Parliament. I'm not sure it necessarily needs to be every three months, because we do need to make sure that he has time to actually do his job. I've said to Michaelia Cash, I think it's a really bad idea to have public examinations of the administrator in Parliament. I just think that that will result in him becoming a political football. It will reduce his independence. The whole point of appointing an administrator to the construction division is to have an independent person get in there, have a look at what is going on and reform the joint. I don't think it's in anyone's interests to have them exposed to political campaigning, and really, if Michaelia Cash is more interested in getting a few grabs up on TV every night with public examinations, it shows she's not serious about the reform that's needed.
PATRICIA KARVELAS: OK, so you're happy for scrutiny, but you want to water down her demands.
MURRAY WATT: Yeah, I'm prepared to be reasonable about this, and I accept that this is an issue of public interest, and I think we're open to some form of public reporting through the Parliament on a regular basis. But I don't think it's in the interests of the administration and cleaning up the union to have the administrator come in, face a barrage of questions and be turned into a political football where, you know, the Government might feel obliged to protect the administrator, the Opposition might feel obliged to go after them - that's not the point of this exercise. The point of the exercise is to clean up the CFMEU construction division and the construction industry more broadly, and that is best done through an independent administrator, free from politics.
PATRICIA KARVELAS: Look, the third demand that the Coalition is insisting on is that any division under administration be banned from making political donations and also from campaigning. Will you ban them from political donations and campaigning?
MURRAY WATT: Again, we're open to banning branches of the CFMEU from making donations to political parties for the period of the administration, and you would be aware that the Labor Party has already taken a decision across most of our branches to suspend the CFMEU and not take donations for the period of the administration. So that would be consistent with the policy that we've taken up anyway. The issue that we have though is that I don't think it's fair on a union's members to say that they can't campaign at all on any issue, for instance, you know, workplace health and safety matters - they might want to run a public campaign asking for changes to the law. I don't think we want to restrict a union and its members entirely from being able to campaign on issues of concern to them, but I certainly think that we can do something around political donations to parties.
PATRICIA KARVELAS: There's another story that's breaking this morning in relation to the CFMEU. The Prudential Regulator has ordered the $92 billion construction industry superannuation fund, C‑Bus and the Queensland‑based BUSSQ fund to review whether its CFMEU‑appointed directors are fit to hold positions in the wake of these allegations. Do you think they're fit to hold their positions on these superannuation bodies?
MURRAY WATT: Oh look, APRA has obviously now made a decision seeking a review of that matter. I don't want to pre‑judge that outcome. But they're entitled to make those sort of investigations if they wish to. What I am concerned about around this debate, Patricia, is that I've seen some people jump on it as another way to open up the debate about industry super funds. We are not supportive of that debate being opened up. Industry super funds have a track record of delivering excellent returns to their members, and in principle, we're supportive of the idea of employees having a say over the use of their superannuation fund through their elected members to super fund boards. So I think it's a matter for APRA what they want to do in relation to this.
PATRICIA KARVELAS: No, but do you welcome it? I mean it does seem odd, doesn't it, given the allegations made about the CFMEU and what you're doing with administrators, that they'd be able to sit there on these boards, you know, it's illogical, isn't it?
MURRAY WATT: Well, I think the individuals who are board members of those super funds aren't necessarily the same people who are under investigation for criminal offences and who've been aired in the media. I think, as I say, it's probably best for me to leave APRA to do its work independently of commentary from me.
PATRICIA KARVELAS: If you're just tuning in, you're listening to ABC Radio National Breakfast. My guest this morning is the Workplace Relations Minister, Murray Watt.
So there's obviously a sort of a sense of urgency around passing your bill. Is it the worst thing if you have to get it through next week, 'cause you're negotiating still? I mean you've got Parliament sitting next week.
MURRAY WATT: We do, but of course, it's also got to go through the House of Representatives, it's got to have royal assent, and really, every day that we delay taking the action that is needed to clean up the CFMEU allows the bad elements in the union continue to do the things that we're all concerned about. There are certainly lots of stories going around about assets being moved within different branches of the union, people's employment being moved around across the union to evade administration. We need to get moving on this. We need to have the administrator appointed as quickly as possible so that they can do their work, and as I say, ensure that this union remains strong, remains an effective voice for its members, but remains clean. I know for a fact that employer groups are pleading with Michaelia Cash and the Coalition to pass this legislation this week. I would have thought that the Liberal Party might be a little bit interested in the views of employer groups on this matter.
PATRICIA KARVELAS: Look, the other part of the CFMEU discussion is that the role that they've played has basically inflated the cost of building things, yeah, like in the construction industry, and that it's flowing on to the housing sector. Now housing is a huge problem, of course, as your Government has acknowledged. Do you think it's inflating prices, the role of the CFMEU?
MURRAY WATT: I've had a bit of a look at this, Patricia, and I cannot find any evidence whatsoever to support that. I understand why people might be thinking that. But in fact if you have a look at the figures around wages growth in recent quarters, wages in the construction sector are growing at roughly about the same amount as they are across the economy. There might be, you know, 0.1 or 0.2 per cent higher, but it's basically the same. The real issue, when it comes to construction costs - and I say this as someone who not long ago went through a house renovation - the real issue is about labour shortages and also about the price of materials from supply chains. And so you know, if you have a look at the-
PATRICIA KARVELAS: Yeah, but Minister, I have to politely interrupt to say many people would be listening and really contest that. Will you commit to actually putting in some genuine research and work into working out what role the CFMEU has had in inflating the price of stuff, because that is a huge problem that many people are arguing has happened.
MURRAY WATT: As I say, I can understand why people will think that this might be contributing to it, but the work that Treasury has already done to look at the drivers of construction prices doesn't indicate that wage rises are the cause here. It's a bit like, you know, we have the Coalition from time to time try to argue that wage rises generally are what's driving up inflation. In fact it's other factors, many of which are global. So as I say, wages in the construction sector are rising at roughly the same as they are across other industries, and the real issues around construction costs - and they are really issues - are labour shortages, and also the cost of supplies. That's the sort of issues that we need to get on top of, and of course that's why we're investing so heavily in skills and training.
PATRICIA KARVELAS: Minister, we're out of time. Thanks for joining us.
MURRAY WATT: Thanks Patricia.