Interview – ABC AM with Sabra Lane
E&OE transcript
SABRA LANE, HOST: Early childhood education teachers are going to be the first to test the Federal Government’s new multi-employer bargaining laws. The laws allow groups of employers in a particular sector to negotiate pay deals with unions rather than doing individual agreements. Unions representing early childhood workers in New South Wales, Victoria and the ACT, are lodging the application with the Fair Work Commission. 60 employers are also participating. Tony Burke is the Minister for Employment and Workplace Relations. Good morning and welcome to AM.
TONY BURKE MP, MINISTER FOR EMPLOYMENT AND WORKPLACE RELATIONS, MINISTER FOR THE ARTS: Good morning.
LANE: Minister, how much of a difference to pay packets do you hope this will make in a sector where a lot of workers are women and who are often lower paid?
BURKE: I don’t have a set percentage figure in my mind, what I’m very conscious of, and the reason the Government changed the laws last year with the Secure Jobs, Better Pay Bill was because a whole lot of people who’d got themselves in front of the award had done it through enterprise bargaining. But in feminised industries like early childhood education, it just wasn’t working. People weren’t able to get the agreements moving in the same way. People kept telling us multi-employer bargaining is actually a way to fix this. And so, having put the laws in place, seeing today that the first industry that’s going to have a go at using these laws to try to get better rates of pay for the workforce is early childhood education, I couldn’t be happier. It’s not just getting wages moving when it’s a feminised industry, it also helps close the gender pay gap.
LANE: Does it mark a fundamental shift in the bargaining process towards workers?
BURKE: Completely. We had ten years where wages were being deliberately kept low and what we’re now seeing is people using the laws that were only changed because there was a change of government and a change of policy that came with that that will result in getting wages moving.
LANE: These aren’t the only industrial relations changes on the go. Business and farming groups have launched a national campaign against the same job same pay policy, which isn’t law yet, it’s not even before Parliament, but that would make labour hire employees get the same pay as company’s permanent workers. Business says it would mean that workers won’t be rewarded for their experience or hard work. Is that right?
BURKE: No. Yesterday was one of the strangest debates I’ve ever found myself in, because business was running a passionate campaign against a policy that the Government’s not proposing, that the Government’s not going to do, and to me, it would sound like a bad idea anyway. Effectively, the way business were arguing yesterday – and there was even someone on PM yesterday afternoon claiming that somehow this would prevent hairdressers from being able to pay different rates of pay for the people in their employment – just not true. What we’re trying to fix here is a loophole.
LANE: What’s going on here, because it sounds like the relationship with business has broken down. How come things like –
BURKE: Business is still participating in the consultation. I can only think it’s either – I think probably they’ve done the focus group research or something like that, with some marketing company, and the actual loophole that the Government’s wanting to close, they discovered was indefensible and so they’ve tried to go off on some sort of tangent.
But the loophole is a really simple one, which is if an employer agrees with their workforce and register ‘this should be the rate of pay’, you shouldn’t then be able to go to a labour hire company and completely undercut what you’ve just agreed to. That’s a loophole. But yesterday in that business media conference, there were people saying, “this will affect family farms”. You’d be hard pressed to find too many local family farms that have got an enterprise agreement in place.
LANE: Put simply, you’re trying to put a floor price in for workers, ensuring that those employed by contractors are paid the same as those employed by permanent business, is that it?
BURKE: I’d use the term labour hire rather than contractors – like this won’t affect the contractor who turns up for a few days to repair something or anything like that. I think labour hire is the better term. It’s a labour hire loophole that we’re wanting to close. But what we need to remember is setting that floor is set at the exact rate that the employer had said was a fair rate of pay, not a dollar higher. It’s only where the employer has agreed with their workforce, registered an agreement that this should be the rate of pay that we think, having done that, you ought to honour it. You shouldn’t be able to use some loophole that then says we can radically undercut that.
A quick example, if I can. I was in the Hunter Valley a couple of weeks ago, where one of the miners had worked for years as a casual, doing the exact same job side by side with permanent workforce. But he was employed by labour hire, so even with the casual loading, he was getting a lower hourly rate than the permanent workforce. That’s not fair. It’s a loophole, it’s indefensible and needs to be closed.
LANE: Reserve Bank Governor Philip Lowe has been warning Labor MPs the generous wage rises that they’ve been backing could make inflation worse, if they’re not accompanied by increases in productivity, there might be another interest rate rise today. Do you agree with the Governor’s view that productivity should also increase with these wage hikes?
BURKE: The Government’s been pushing very hard to improve productivity and that’s why the Governor himself made clear that, if anything, the Budget that we’ve delivered has put downward pressure on inflation, if anything. In terms of the work that needs to be done by Government, we are doing that. I’ve seen in the last few days since the Annual Wage Review came down some people effectively wanting to blame workers for any decision that the Reserve Bank might make.
We need to remember last year’s Annual Wage Review was only 10 per cent of the total wage growth in the country. That’s because the people affected by the Annual Wage Review are the people on the lowest incomes. They’re the people relying on it and some sort of argument from some that we can ignore what’s happening internationally, we can ignore what’s happening with supply chains, and we’ll blame any interest rate decisions on whether cleaners and shop assistants get a pay rise. I just don’t think it stacks up.
LANE: Tony Burke. Thanks for joining AM.
BURKE: Great to talk to you. See you.
LANE: Tony Burke is the Minister for Employment and Workplace Relations.