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Read all the latest news from Brendan O'Connor MP


October 28, 2018

DAVID SPEERS: Brendan O’Connor, thanks very much for joining us today. So just to put it simply how would Labor get wages up?

BRENDAN O’CONNOR, SHADOW MINISTER FOR EMPLOYMENT AND WORKPLACE RELATIONS: Good morning, David. Well there’s a number of things we would do immediately if we are elected. Firstly we will restore penalty rates for up to 700,000 Australians, most of whom are relatively low paid, hardworking, in retail and hospitality. We would look at ensuring that forms of work like labour hire doesn’t get to undermine employment conditions by making sure that labour hire workers would be paid no less than direct employees. We will remove the ability of employers to unilaterally terminate enterprise agreements. That’s been happening too often, which has been reverting conditions of employment to the award. And also we will be looking at, of course, the way in which bargaining occurs in order to set the balance so that working people have a capacity to get decent outcomes at a time when profits are high and productivity is good. At the moment David-

SPEERS: I’ll come back to the, sorry-

O’CONNOR: Wages have been stagnating for five years under this
government’s watch.

SPEERS: I’ll come back to the bargaining changes you are contemplating, but just on penalty rates, if you are going to restore penalty rates for those in retail and hospitality, what about those who have lost their penalty rates under union workplace agreements at places like Coles and Woolworths?

O’CONNOR: When you mean union, you mean employer and union agreements. Any agreements must meet a test. Under the current Act it’s the Better Off Overall Test. And if you actually restore penalty rate you are restoring them to the award. And if you restore them to the award, that’s the test that applies to future enterprise agreements. So for example, you can change the arrangements for penalty rates under agreements, provided you are not worse off, or in fact you have to be better off overall. If you lift the award conditions of employment you actually lift the test, thereby lifting employment conditions for future agreements made between unions, employers and employees.

SPEERS: Do you concede though that for some of these workers they have not been better off as a result of these union-employer agreements at Coles, Woolworths and other big retailers?

O’CONNOR: If they have not been better off than they are not compliant with the Fair Work Act. So to be very clear here, it’s fair to say we’ve had some real issues around measuring the test. And it’s true to say, David, there are non-monetary benefits that sometimes have to be measured against monetary benefits. However, we expect the test to apply properly. And if you restore penalty rates, for example, to retail awards you lift the employment conditions of the award you thereby lift the test, you thereby ensure that employment conditions under agreements will be the same or better than they are now.

SPEERS: Now, to the bargaining rules that are in place at the moment that were brought in by Labor of course, enterprise bargaining. Will you agree to the ACTU push to introduce at least some level of industry wide bargaining?

O’CONNOR: We’re up for certainly looking at multi-employer bargaining. Forms of industry bargaining currently are allowable under the Fair Work Act. The low paid bargaining stream was the provision of the Act when introduced. However, David, it hasn’t worked. There’s been no successful outcome for low paid workers to use that mechanism.

So firstly let’s be very clear, we will examine multi-employer bargaining in order to ensure that at the very least what was put in the Fair Work Act can be realisable - that you could achieve outcomes, which doesn’t occur to date. We are looking beyond that, and I’m certainly looking around the world at some of the most effective forms of bargaining to ensure we see outcomes good for employers and good for workers. I think we can get the balance right here. Certainly when you look at multi-employer bargaining the 11 economies that have AAA ratings by the three agencies, the majority of those countries have multi-employer bargaining. But most multi-employer bargaining also comes with local bargaining as well. A combination of industry or sector bargaining with single employer arrangements as well.

So I think that it is really important that we do examine these options so that workers feel that they are getting a fair share of dividend, because currently profits are rising, wages are flat lining. Productivity in most of the economy is going well, but that’s not seen or reflected in wage outcomes.

SPEERS: Alright, so are you looking across the board at this industry-wide bargaining approach? Or only in low paid sectors like aged care and child care?

O’CONNOR: My priority and my focus is on those who are not getting a fair share. And I have to say that tends to be those people who are not receiving high wages or very good conditions of employment. My focus and Labor’s focus should always be on those workers who do not have the capacity to bargain in a manner that gives them a fair share of the growth.

SPEERS: Who would you identify those workers as?

O’CONNOR: I think the first thing that comes to mind would be cleaners, childhood educators, who if you look at their responsibilities, they are not getting the pay they deserve for their qualifications and responsibilities and the important work they do. There’s a series of workers I could exemplify, but really people that are on modest and median wages certainly would be the focus of a Labor government. We will examine other areas too, but there are people who are doing quite well out of the current arrangements-

SPEERS: What about construction workers, Brendan O’Connor? Would you class them as being in need of this sort of industry-wide bargaining?

O’CONNOR: I think what’s happened with construction workers, David, has been a government that has sought to attack them in other ways. Their wage outcomes have been ok, but I have to say the construction industry has become less safe as a result of the efforts of the current government really to target their organising -

SPEERS: So is industry bargaining appropriate for construction workers?

O’CONNOR: I think there has been a set of laws that have been created just for construction workers that are in breach of our ILO conventions. I have to say my focus is, as I say again, on those who cannot receive decent outcomes. Construction workers I guess have our focus in this respect: we don’t believe that they should be subject to their own set of laws that are unfair. That’s why Labor has made clear that we will be abolishing the ABCC.

SPEERS: Yes, so you will get rid of that, we know. But from your comments here this morning it seems they are not a priority for industry-wide bargaining but you are not ruling it out either.

O’CONNOR: I don’t look so much at the sector, firstly I look at the outcomes. What are the wage outcomes that have occurred over the last five years? Well generally speaking wages have flat lining. In some sectors of the economy, David, they have fallen in real terms -

SPEERS: But in construction they haven’t been too bad have they?

O’CONNOR: No in construction they’ve done quite well. My major concern in construction is the pernicious provisions of the ABCC, the increased likelihood of fatalities or injuries, because people are too scared to raise health and safety issues. That’s the main concern I have. In construction, certainly their wage outcomes, because they’re organised have been, relatively speaking, quite good.

SPEERS: What about on the wharfs – wharfies, maritime workers – would they qualify, you think, for industry wide bargaining?

O’CONNOR: Again, my focus as you understand, we have the low paid bargaining stream that’s contained within the Fair Work Act. That has not worked in a manner in which the previous Labor government thought it would.

So, firstly, why didn’t that work? Why didn’t we actually ensure that we have a vehicle in place for multi-employer bargaining that works for low paid workers – that’s my priority. There are those that can do quite well without this vehicle, this approach.

So, whilst we haven’t ruled out these matters, and we will address that before the election, Labor’s focus should be about low paid and median wages, looking after people who are struggling to make ends meet with the cost of living so acute –

SPEERS: So, you will spell out the detail on this before the election?

O’CONNOR: We have been outlining detail on industrial relations now for the last five years. By way of contrast, of course WorkChoices was introduced without one bit of it being foreshadowed by the then Liberal Government

The Liberal Government that we have in place now – Scott Morrison hasn’t announced one thing in the area of industrial relations. So we don’t know what the current government has in store for workers after the next election if they were to win.

We will be outlining, as we have been, David, our plans to make sure workplace laws are fair and balanced, and workers get a decent outcome.

SPEERS: The fear has been with industry wide bargaining, which we haven’t had in Australia for some decades now, that even if it was just in say the childcare sector, one of the areas that you identify there, if they can shut down the entire sector through strike action – what is that going to mean for families? Who would ultimately have to pay if they are to receive a higher pay? You’re sure they will be able to take stronger action even if that would be disruptive to the economy and families. Who ultimately pays for that?

O’CONNOR: Well, firstly I think it’s somewhat hysterical for the government to claim that if you have a new form of bargaining that provides benefits for working people that somehow there’s going to be an adverse impact on the economy. That’s not the evidence, that’s not the international evidence –

SPEERS: With respect, that’s the point of giving them this extra power, isn’t it? It’s to give them stronger industrial muscle.

O’CONNOR: Well, let me just finish the answer please. As I say, of the eleven economies with AAA ratings, the majority of them have multi-employer bargaining as a part of their framework of industrial relations. There is not a high instance of industrial action for countries with multi-employer, sector or industry bargaining. That is not true.

In fact, there is no correlation. Well, if there is one, it’s a weak correlation between industry or sector bargaining and a high incidence of industrial action. Those claims are hysterical, they’re not evidence based. The fact is what we want to do is to ensure that people have the right to bargain.

The problem at the moment, David, is that workers are not even getting at the table. There’s no bargaining table for too many workers, and therefore they’re left to fend for themselves against, of course, all forms of employment like casualisation, labour hire use or misuse of forms of employment, making it hard for working people.

So, we don’t want to have a system that just ensures industrial chaos. We don’t see any evidence around the world where they use multi-employer bargaining as the predominant form of bargaining, that we are not seeing a high incidence of industrial action. Please point to me those countries that actually exhibit those manifestations. We don’t see that.

SPEERS: Let me turn to border protection and refugees, Brendan O’Connor. A new poll today shows pretty strong support for resettling refugee children from Nauru in New Zealand. Under what circumstances would Labor support re-settling refugees in New Zealand?

O’CONNOR: Well we just think that’s the option that the government should entertain. As you know David, we believe that this is an over-reaction by the government to suggest that we blanket prohibition on any detainees who settle in New Zealand coming to Australia. But we are willing to negotiate this with the government.

The urgent matter now is that we have children, we have families that are on Nauru and the medical advice is that they should be provided medical support out of that centre. We believe that the New Zealand option provides an answer for the government. Now, let’s be very clear, Scott Morrison before the Wentworth by-election made all sorts of noises about him being genuinely open to that proposition. So we, in good faith, went to him and said we are happy to resolve this matter. After the Wentworth by-election he has closed that option, it would appear, and started attacking Labor for actually considering reconciling this issue.

SPEERS: OK, just to establish what Labor’s position is. What conditions would there be for refugees re-settled in New Zealand under Labor?

O’CONNOR: Well as I say, we think it’s an over-reaction by the government to openly prohibit. But, frankly, given the urgent situation in Nauru, we are willing to negotiate with the government to get those detainees, those children, those families, into New Zealand if New Zealand is willing to take that option up. As I understand it, they are willing to take that option, therefore the government should be facilitating that provision.

But for some years now, they have been saying that is not an option. Scott Morrison before the Wentworth by-election said it was being entertained –

SPEERS: OK, just on Labor’s position Brendan O’Connor, is it still Labor’s position, as Kevin Rudd said back in June of 2013, soon after you’d left the immigration portfolio, that people who arrived after the 19th of July 2013, would never settle in Australia?

O’CONNOR: Well, certainly we’ve said in relation to New Zealand, no, our position has been that we will confine Scott Morrison’s proposition to those detainees in Nauru, if they go to New Zealand. If we can contain that prohibition to those, it is interesting to note though there is no similar prohibitions to those that have been settled in the United States.

But, frankly, we cannot continue to play petty politics with the lives of children. Scott Morrison had given what I thought was a genuine offer to sit down and work this thing through and he has withdrawn that offer. I don’t know where the government stands now, so it’s hard -

SPEERS: Just to try and pin down Labor’s position on this, so they would be able to resettle in New Zealand, but would they ever be able to come to Australia, would they be able to marry an Australian and come here? Come on an employer sponsored visa? What is Labor’s position?

O’CONNOR: Well it seems to me if the government is vetoing this position until they get support to prohibit those detainees going to Australia then of course Labor will consider that prohibition because this is a matter of urgency - life or death -

SPEERS: Indeed, even if it means they can never come to Australia on the spouse visa or -

O’CONNOR: Well we think it’s an overreaction but right now the lives of people hang in the balance and we need to get people out of that detention centre and if that is the offer on the table then certainly Labor is going to seriously consider that, but right now, David, the government has clearly withdrawn that offer because there is no legislation. The proposition put by the Prime Minister Scott Morrison before the Wentworth by-election seems to have been a very cynical thing just to win over some votes in Wentworth and now they’ve withdrawn that -

SPEERS: Well it sounds like you are will to agree to this legislation that has been parked in the Senate for a couple of years then?

O’CONNOR: Well if we’re left with the option that they stay languishing in a detention centre or we can get people to New Zealand so they can be settled, then of course we should be looking at the latter. And that has been made clear to the government, but I’m not sure the government is serious, David about their proposition. I think it’s a very cynical attempt by Scott Morrison to say one thing before the Wentworth by-election like he has on so many other matters, and another thing after the Wentworth by-election.

SPEERS: Alright just one more on this issue. There are around 670 so-called unlawful non-citizens in Australia. Refugees who have been transferred here for medical treatment or treatment of a family member. What would Labor do with this case load? Would they be able to stay in Australia permanently?

O’CONNOR: Well as you might remember, certainly the Howard government had people settle here and then just allow them to stay in the communities. I think we’d have to look at it case by case. But frankly the current government seems to be doing exactly that. They’ve had people transfer to Australia. You know, this government says so little about their conduct and about what they are going to do in this area of public policy, it’s always hard to know, but it would appear that they are quietly having people transferred from offshore detention centres and I don’t know if they’re looking to return them. So it would be good to know what the government is looking at but certainly we’d have to examine that on a case by case basis, no doubt.

SPEERS: Look a final one just on negative gearing, Brendan O’Connor. Labor has been a little bit all over the shop this week on what impact it might have on house prices. What impact will Labor’s policy have?

O’CONNOR: Well they’re modest. Treasury said they would be modest, the McKell Institute said they would be modest. This is a structural change to make sure that home buyers get an equal footing with investors.

At the moment investors are being subsidised to continue to buy investment homes. You only have to go to an auction in Melbourne or Sydney as you know David and what you see is a home buyer trying to win an auction, loses the auction, the investor wins and gets their sixth home and then offers the home buyer that they be a tenant in the investment home. This is the problem, investors have done very well -

SPEERS: So would this policy have a modest downward impact on house prices? Is that what you are saying?

O’CONNOR: It would be modest. In fact it has been argued that given investing has cooled over the time, the impact is even going to be negligible. The reality is that this is long term structural change to give home buyers a chance -

SPEERS: So hang on does that mean house prices go up, down or don’t change at all?

O’CONNOR: I think it was a modest decline at a time when investment was, last year – in fact it’s now being argued that the right time to introduce this policy is when investment is cooling, and it has been cooling. This is about ensuring that people get a chance of owning their home against investors who are being subsidised -

SPEERS: But a lot of this modelling was done before the cooling in house prices. Do you have any idea what it would do now?

O’CONNOR: Economists of a number of eminent bodies have made it clear that if anything the easing in investment will make this policy easier to implement with less impact and I think that’s right. I think it’s fair to say this is an important policy to give people who want to buy their home an opportunity. It’s also -

SPEERS: Is it worth getting some fresh modelling on this to see if now is the right time to do this?

O’CONNOR: Look, as I say I think the advice we received from the McKell Institute and indeed Treasury’s own advice was the impact would be -

SPEERS: Yeah, but it’s a bit old now though isn’t it, before the change in the market.

O’CONNOR: Well there are always ups and downs in the market, we’re talking about long term reform to make sure home ownership doesn’t become an unrealisable dream, which seems to be the case for too many people, even people on pretty good incomes.

One of the other reasons why there is a cooling in prices by the way, David, is wage stagnation is leading to that. So it’s not just the regulatory body that’s had an impact in terms of tightening access to credit, it’s also wage stagnation, something this government fails to do anything about.

SPEERS: Which brings us back to where we began. Brendan O’Connor thanks so much for joining us today, really appreciate it.

O’CONNOR: Thanks David.