March 06, 2017

PETER VAN ONSELEN: Welcome back.  You're watching Sunday Agenda. We've just been speaking to the Treasurer, Scott Morrison, to talk penalty rates.  We are now joined live out of Melbourne by the Shadow Workplace Relations spokesperson for the Labor Party, Brendan O'Connor. Thanks very much for your company.


VAN ONSELEN: When will   when will Labor commit in conjunction with what you've already announced around, if elected, looking to reverse this penalty rates decision by Fair Work Commission?  When will you go the whole hog and just abolish them altogether if you're not going to take reference to what the independent commission comes up with?

O'CONNOR: Well, that's a nonsense. Of course we support the Commission, but not in this instance. And I have to say to you, Peter, it is a rare thing for us to find untenable a decision of the Fair Work Commission, but that's how we found ourselves last Thursday week and, as a result, we had to make a threshold decision, and we did. And we did so in favour of low paid workers, who'd go backwards at a time when wage growth is at its lowest in a generation. I think it was the right decision. I'm calling upon, and we're still calling upon, the Prime Minister to change his mind and join Labor and support low paid workers.

VAN ONSELEN: I have got to ask you this, though, Brendan O'Connor, and I've written about the fact that your side of politics is on the side of angels when it comes to public opinion on this and the politicking of it. Having said that, though, why did Bill Shorten declare that he would support the decision of the independent umpire in interviews before the decision was handed down if he had no intention of supporting the decision unless it came down the way that he wanted it to?  It's disingenuous, isn't it?

O'CONNOR: I think it's always been the case, almost by reflex, that federal Labor politicians are likely to support the umpire. We're the only political party that have been guardians of this institution for 113 years. And so, it is a rare thing to do. Quite frankly, last Thursday week, when Bill and I looked at the decision, we were, to say the least, surprised and disappointed that there was a significant net loss to workers without compensation whatsoever. And we felt we had no option but to stand on the side of workers, and I can assure you, we make no apology for it. It was the right decision to make. Let's remember here, we're talking about award minima;  that is, the floor of industries across the country.  And we still haven't given up in convincing the Government, and not just the Government.  Let's be honest, One Nation, Senator Xenophon, Senator Hinch, they, too, should be considering their position.

PAUL KELLY: Shadow Minister, how sweeping is the parliamentary amendment that you're looking at here, because I think it goes beyond just this particular decision by the Fair Work Commission in relation to hospitality and related sectors, and it is more wide ranging in terms of the removing the discretion the Commission has across the board in terms of cutting pay rates?

O'CONNOR: That's true, Paul. The first thing it does    there's two provisions, in effect, of the private members' bill moved by Bill Shorten last week.  The first one would make inoperative the effect of the decision so that low paid workers wouldn't get a pay cut, and it also would ensure that award minima conditions would effectively be set so that you couldn't cut the take home pay of those workers on the award minima. And, quite frankly, that's consistent with what our view was about the award minima. We saw it as a floor and, for that reason, there's two provisions to the legislation as proposed by Bill last Monday.

KELLY: That's a pretty fundamental change, it would seem to me, to the Fair Work Commission's powers and discretions?

O'CONNOR: Look, it puts some constraints on the discretion of the Commission. However, the bulk of the   the bulk of instruments that cover workers and employers are enterprise agreements. We believe collective bargaining is the best way to both produce outcomes for workers and employers. And, therefore, whilst it removes some discretion to cut the lowest paid, in so far as if they're reliant solely on the award, of course there's a capacity for them to consider other matters once they're bargaining.  And that's reasonable, I think. Paul, there's always been a   well, until WorkChoices, there was a no disadvantage test for enterprise bargaining. And when we repealed WorkChoices, we put in a 'better off over all test' for enterprise bargaining.  It was somewhat paradoxical that there was protection for people bargaining under enterprise agreements but there was no protection to stop a net fall in the income for the awards. And, therefore, we're clarifying that, as far as we see it, and we think it is a reasonable constraint on the Commission's discretion.

KELLY: Now, in terms of the politics and the policy of this dispute between Labor and the Government, to what extent do you see this as a replay of the same principles involved in WorkChoices, and will Labor mount the argument and campaign on a similar basis?

O'CONNOR: Look, I might have to leave that to commentators to assess the sort of comparisons in some senses, Paul.  But it doesn't surprise me that the Liberal Party, by reflex, welcomed decisions when workers' wages are cut in real terms. It doesn't surprise me at all given their history. Given that there are 60 Liberal MPs on the record saying that they either want to abolish or cut penalty rates. So I think it is a question   I guess it is certainly a matter that is front and centre in the national debate about inequality in this country. I mean, I don't want us to go down the American path. You see the working poor.  You see the hollowing out of the middle class. You see inequality at very extreme levels and I think that has led, in part, to the societal and political dysfunction of the United States, a country that I have admiration for but that I have seen over the last 30 years becoming increasingly unequal and marginalising people.  And, really, just undermining its own middle class. So I think that's part of the broader debate that will happen before the next election.

As to whether penalty rates is the front and centre will depend upon, I think, Malcolm Turnbull and whether, in fact, he will reconsider his position in relation to the bill prosed proposed by Labor.

VAN ONSELEN: Can I ask you   I have read, heard and understand Labor's arguments against the Fair Work Commission decision. I wonder, though, whether specifically going to some of the analysis of what was a very long piece of research before coming to this decision by the Fair Work Commission, I wonder whether Labor accepts the finding in the report that this change would improve and help with levels of employment on Sundays? Do you accept that, but just simply say...


VAN ONSELEN: is not a price worth paying?

O'CONNOR:  No, I don't accept that. And so far as the decision was concerned   500 pages or so, Peter   what it does say is there may be modest positive employment outcomes, but then goes on to talk about that that will be discounted because of substitution and other effects. Now, let me just be very clear as to how we see it...

VAN ONSELEN: But they still made the decision, Brendan O'Connor.

O'CONNOR: They did.

VAN ONSELEN: They can't have shot down their own decision too much because they chose to go down that path?

O'CONNOR: No, that's right, but we don't accept the decision. And we don't accept it because we don't think it is a good idea to cut money from workers who spend almost their entire income on goods and services. We believe there'll be a reduction in consumption of goods and services, particularly discretionary items. We think that will actually have an adverse impact on economic growth and indeed, if anything, that's going to reduce the opportunities of employment. So we don't   and the idea that you shift money over to the share dividends, that may well be OK in some instances, but for others it may mean the money will go overseas or will be kept and not put back into the economy. So this is a   I think this notion is, in part, a trickle-down theory which I don't accept, I haven't ascribed to, neither has Labor. It's sort of the thing that's propounded quite often. It is often in keeping with the Government's idea that we should take $50 billion and provide cuts to big business. Again, it is a trickle-down economic theory, which I think has been repudiated for   particularly in recent times, not just by Labor, by the IMF, the World Bank, who continue to say you can't just shift money from working class and middle class families to high   to richer and   to richer people or to big business. So I think our arguments are sound, both socially and economically, and we're happy to continue to prosecute the argument.

VAN ONSELEN: Are you shocked and outraged that a former Assistant Secretary of the ACTU as the now head of the Fair Work Commission has laid down a decision like this, because it is one of your own, if I could put it that way, that has done this?

O'CONNOR:  No, look I'm   look, I have a regard for the President of the Commission. I just disagree with the full bench in relation to this matter on this instance. But, you know, we   we appoint people all the time to independent bodies, even to   you know, to more august bodies than the Fair Work Commission. I mean, we appointed Justice French as the Chief Justice to the High Court. He found against us on the Malaysian arrangement. I wouldn't reflect   we then sought to legislate.  It wasn't like I was wanting to reflect on Justice French or, indeed the High Court when Labor chose to then seek to legislate. Of course, that was stymied by the Greens and Scott Morrison, and Tony Abbot.  But my point is, we don't like having to take a decision that's separate from an independent body like the Fair Work Commission or, for that matter, a court but it happens. And Malcolm Turnbull has done it on three occasions with the   with the CFA matter, with the stopping truck drivers going...

VAN ONSELEN: The difference is   I get all of that...

O'CONNOR: ..up he abolished the commission, and also interfering on native title. Well, if you get it, well, let me say it then.

VAN ONSELEN: In fairness, on   well, sorry, in fairness on each of those they flagged their intentions on this whereas on this occasion, your leader, Bill Shorten, flagged beforehand his intention to abide by the independent umpire's decision.

O'CONNOR: Well, they came very late to the CFA matter, in fact, let's be honest, and they chose to do so because some media outlets were running a campaign on it, particularly in Victoria. It doesn't   if you're saying   and we flagged this in January. What we said was before the decision we made it very clear we'd have a grave concern if there was a cut in real income of retail and hospitality and other workers. It's going to compound the gender wage gap.  It's going to make things less equal and less fair, and I don't see the economic arguments and neither did Bill Shorten and neither did Federal Labor.  And I think we're right to prosecute the argument and stand up for those workers.

KELLY: If we just take a step back and look at this decision, O'Connor, isn't it true that the way that life in Australia, the way social life has changed, the way the nature of Sunday work has changed, that the whole idea of having special and higher penalty rates on Sunday to look after people is an absolute obsolete concept in 2017?

O'CONNOR:  I know we're having this interview on Sunday, Paul, so I can understand some “sympathise” there. However, when I decide to have a birthday party, I'm not going to call people round, you know, 11:00am on a Wednesday morning. If I can afford it   you know, people have weddings on weekends and banks don't open on Sundays, and neither do parliaments sit, and so to my...

VAN ONSELEN: But this is equalising the rate between the two days of the weekend?

O'CONNOR: Well, yes, but the point   well, arguably, you could say why move Sunday to Saturday? I mean, my point is this   I'm not suggesting some of the arguments did not have some merit but the consequence was that low paid workers in this country, who are   in fact, whose wages are going backwards   wages are falling in most sectors of the labour market at the moment;  you could argue there is a wage recession in some areas of the labour market   and this decision comes out, and what do we choose? We like to say, "We need to fix some of the problems in this country, so we will tackle it by going after the people with the least amount of money, with the least amount of income." I mean, that's the consequence. That's not to say you can't put forward an, argument about what has changed with respect to the way Sunday is viewed. But I mean the net result is people who can't afford it, who can't afford to pay for essential items, will lose out. And at a time when wage growth is at its lowest since at least 1998, that's not reasonable. It's not a reasonable thing to do. And I think for all the reasons I've outlined, we stand by our decision.

VAN ONSELEN: Brendan O'Connor, Shadow IR spokesperson for Labor, we appreciate you joining us on Sunday Agenda, as always.

O'CONNOR: Thanks, gentlemen.