February 09, 2017

SUBJECTS: ABCC;  Child Care and Family Payment Cuts.

LAURA JAYES: I just want to ask you about this backflip from Derryn Hinch today, what’s wrong with that?

BRENDAN O’CONNOR, SHADOW MINISTER FOR WORKPLACE RELATIONS AND EMPLOYMENT: Well, it’s going to cause enormous uncertainty for the building industry, let’s be very clear here

JAYES: What’s uncertain about it

O’CONNOR: Well let’s go through it.  There was a Bill on the table since 2013, it was opposed by the Parliament.  At the end of last year, on December 2nd the Prime Minister stood up in the House of Representatives and called it a vital reform, he actually proudly proclaimed the compromise had been reached and he had managed to pass this Bill through Parliament and provided therefore some clear vision for the building industry. What’s happened in the dead of night is that there’s been proposed  changes,  now what that does will in effect mean that many, many major employers and smaller employers who have union agreements will be locked out of any tendering of Commonwealth funded projects, now that’s -

JAYES: They can still tender can’t they?

O’CONNOR: But they can’t win.

JAYES: But if they win the tender and agree to change it they can still get the -

O’CONNOR: It’s not just the employers

JAYES: Why can’t they change it?

O’CONNOR: Well this is the point, these agreements are agreements entered into under the Commonwealth law, under the Fair Work Act, they can only be done by agreement of both parties, they are signed documents that usually go for at least three years.  So what it means is, the employers and the unions would have to agree, that usually takes a long time in trying to bargain if you are going to change any agreement that is in place.  They’re also opening up the industry to protected industrial action, because you are no longer having agreements.  As we know, during the course of an industrial agreement, there is very little disputation from either side.  So my concern is this.  There is a critical mass of employers who currently have agreements which are not Code compliant.  They were given a grace period because they’d entered into those agreements in good faith and pursuant to the law at the time.  They are now being told to rip them up – well, they don’t get to unilaterally rip them up, so it’s going to cause a lot of chaos in the building industry.

JAYES: Many companies I hear have already factored these changes in though, and it’s now a nine month transition period, so I don’t see where the uncertainty is.  This was always the government’s intention, right?

O’CONNOR: Well, firstly, it’s not a small amount of companies who have agreements which are not Code compliant.  There are very large companies which are not Code compliant and they don’t get to unilaterally rip them up, they have to renegotiate these agreements if they can. 

But there are a lot of questions that come out of this.  What if the only people that tender are not Code compliant?  What if the best tender is something that is not Code compliant, why wouldn’t that win the tender?  So there are a lot of issues in this. And it’s not just Labor saying this, it’s not just the Unions, there are major employers who are privately very upset with this.

JAYES: Again, Lendlease and other companies have already factored this in in their tendering for business.

O’CONNOR: I don’t agree with that. I know that’s not the case otherwise they wouldn’t have agreements that are not Code compliant.

JAYES: This has always been the Government’s intention, as you say, it has been on the books for about two years, the Government had to make a concession to get something through.  Now, your old press releases are very helpful in this case, you said the Bills were watered down so much that it begs the question how is it different from the current building regulator, and you saw it as a mere shadow of the former ABCC Bill in order to get passed -

O’CONNOR: In relation to the Bill, but not the Code.

JAYES: But now it has more teeth?

O’CONNOR: Not so much, not in relation to the Bill.  What I was referring to there Laura was the Bill itself, in terms of some of the civil liberties, now I am glad they compromise, I said they backflipped.  Now the Code wasn’t changed, it was just delayed.  Now they are bringing it forward, many companies I am saying, you say some companies would have taken into account the Code and that’s true, but they were given the indication by the Prime Minister no less on the 2nd of December that it would come into effect in 2018, that’s now been brought forward.

JAYES: But they still have a bit of time surely, these big companies have enough apparatus.

O’CONNOR: But the problem is they don’t get to unilaterally decide this.  What will happen is there will be industrial disputation and conflict and disagreement, it has led to uncertainty, I’ve  spoken to major companies as recently as today and they are very concerned about this. Now, it’s not going to get what they want which is certainty and stability but it’ll lead to more disputation which is counter to what the Prime Minister’s rhetoric is which is providing greater efficiency, certainty and productivity in the building industry. So, I think –

JAYES: Obviously Derryn Hinch is getting different mail –

O’CONNOR: I think Senator Hinch in particular has not engaged with anyone who has got concerns about this, didn’t confide in anyone who has got concerns about this proposal and I’m very disappointed with him.

JAYES: Ok, let’s move on to the family tax benefit and childcare changes. The Government argues this will be better for low income families and when you roll in the childcare package, low income families actually get an 85 per cent rebate on childcare. Isn’t that a good thing?

O’CONNOR: If it was just childcare –

JAYES: You have to pay for it somehow though.

O’CONNOR: Let’s be clear here they’re taking the family supplement away, they’re cutting pensions – they’re effectively cutting money that goes to pensioners, to families, to young people between the age of 22 and 24, they’re looking to cut the Newstart allowance by 20 per cent –

JAYES: Hang on, this isn’t part of this package though so let’s just – the family tax benefit A and B.

O’CONNOR: But these are all the things that are being put up in the Omnibus Bill. Cutting Newstart by 20 per cent for 22, 23 year olds and cutting the supplement. The question is then how do we pay for some of the childcare improvements? Well, the reason there was such a passionate debate in the Parliament today is because Labor says that why would you give fifty thousand million dollars – $50 billion - $7.4 billion of that to big banks and expect families to pay $2.7 billion? It’s about priorities.

JAYES: So the long and short of it is there’s no negotiation, Labor won’t support it?

O’CONNOR: There’s always negation but we can’t support it in its current form because it’s too harsh and unfair –

JAYES: So you’re denying some families an extra $20 a week and this more generous childcare package –

O’CONNOR: No, no but there’s a net loss to families. I accept –

JAYES: Not all families though –

O’CONNOR: But overall there’s an aggregate loss and so the question is - it is a matter of priorities. Labor and Bill Shorten want to look after pensioners and families and Malcolm Turnbull wants to give his rich mates, bankers, billions of dollars and that’s the difference between the two major parties.

JAYES: One more question. The politics of envy I think Bill Shorten tried to play again today labelling Malcolm Turnbull Mr Harbourside Mansion. Why play that?

O’CONNOR: Malcolm Turnbull is clearly out of touch if he thinks he can give $50 billion to multinationals and big banks and at the same time put his hand in the pocket of pensioners and students and young people I think we’ve got every right to say he is out of touch and must not live in the real world if he thinks this is a reasonable thing to do. It’s not a reasonable thing to do.

JAYES: What do you think about the debate that went on in the Parliament this afternoon? Malcolm Turnbull and Bill Shorten got pretty fired up is that a –

O’CONNOR: Look, I think we quite rightly passionately defend pensioners and families. I think the Prime Minister is out of touch if he thinks it’s reasonable to just attack Bill without defending his position because he can’t defend it because most people don’t think you should take an axe to pensioners or take an axe to Newstart or take an axe to other benefits for low paid people to pay for childcare arrangements and at the same time give fifty thousand million dollars to banks and multinational companies much of which won’t stay in this country. That’s a fundamental difference and no wonder there’s some passion. The reason I thought the Prime Minister was a little out of control is because he knows that it’s not the right thing to do and he’s trying to defend the indefensible.

JAYES: I’m not sure that he’d agree with that Brendan O’Connor –

O’CONNOR: He wouldn’t say that but he surely knows it or otherwise he doesn’t live in the same world I do.

JAYES: Ok, Brendan O’Connor thanks for your time.

O’CONNOR: Thanks Laura.