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Read all the latest news from Brendan O'Connor MP


July 18, 2019

BRENDAN O’CONNOR, SHADOW MINISTER FOR EMPLOYMENT: I just wanted to report on, or respond to, the ABS figures that have outlined last months’ unemployment rate. The unemployment rate is the same at 5.2 per cent and of course whilst there has been some net employment growth, very, very little employment growth in full time, there’s been a fall in part time. Really it’s just the same as usual when it comes to the unemployment figure. However, I think there’s just a couple of things I need to mention.

Firstly, youth unemployment has hit 12 per cent. The fact that the unemployment rate amongst young people is more than double the national rate is a problem that needs to be dealt with by the Government discretely as a dedicated imperative. They need to do more to look after young people and of course the PaTH program, shown recently on Channel 9 news as full of rorts and rip offs, is not sufficient to remedy the problem of very high youth unemployment. What a terrible way to start one’s life after school with not being able to find work. We know this, the longer a person is unemployed, the harder it is for them to find work. The Government needs to do more there.

But most importantly, again, I make the point we see underemployment at very high levels. The underutilisation of the labour market is in excess of 13 per cent and that is a real problem. When you’ve got over 1 million Australians looking for more work and you’ve got 700,000 Australians looking for any work, than you really have problems in the labour market. Which also speaks to why, one of the reasons why, we have the lowest wage growth in many a year, presided over by this Prime Minister now, and then of course as Treasurer. But yet nothing, nothing on the books as to how the Government will deal with the lowest wage growth on record. That is actually creating a whole series of problems, including household debt which is of course very, very high in this country. Which is leading to people not even seeking other work. And that also goes to the question of people being fearful of moving from one job to the next, which was identified most recently.

So there are real issues. There are structural problems in the labour market. There are challenges with underutilisation, which is one of the reasons we see the lowest wage growth. Labor has made clear we support the tax cuts for 10 million or more Australian workers. That’s why we supported those two stages. We sought stage two to be brought forward. And we also sought to bring infrastructure forward to help lift the economy. The economy is anaemic and there are real issues we need to deal with.

I’d just like to touch on two more issues if I may and then take questions. The second matter I’d like to touch upon is the fact that the Federal and State and Territory Industry Ministers are meeting today to discuss the crisis in the building industry. I mean this is a crisis when you have a situation where architects, engineers, surveyors cannot get indemnity, cannot be insured, because insurers are fleeing the industry because of this problem. So there’s a real crisis around insurance indemnity and the Federal Government has a role to play with State and Territory Governments to respond to this crisis, otherwise we are going to see a major decline in this sector, this very important sector to our economy and to this nation. Therefore the Federal Government has got to stop washing its hands of this matter. It’s a state issue but it is a federal issue too. The national insurers need national leadership and the Federal Government should be showing some. But also too and perhaps most pressingly deal with dangerous products being used in buildings around this nation.

We’ve seen the most tragic example in Britain of the Grenfell disaster. We do not want to see a tragedy in this nation of fatalities of people who are living in what they thought to be a safe dwelling, and yet of course because of inflammable products they were victims of a tragedy. Now, there are real issues about inflammable cladding in buildings in this country, and let’s be very clear, the Government, the Federal Government is responsible for the regulation of the importation of products. That includes products that are used in the building and construction industry and therefore they have a responsibility as to whether we would like to see those products in this country.

Now Labor is reviewing its policies, but we made clear, if elected we would have banned the importation of these products that are highly dangerous. They put at risk the public and indeed put at risk any residents in buildings where that cladding is used improperly, which of course has happened. We know the products are in the country and we also made clear that cladding, if it was used knowingly by a builder, should attract serious sanctions against a builder if the builder knowingly used that dangerous product inappropriately. We call upon the Government to consider these matters because of the dangers, the public danger and as I say more particularly, the danger to those people that reside in those buildings.

We want to see something come out of today’s meeting. We’d expect there to be some movement on the indemnity insurance. We would expect the Federal Government to start taking a leadership role with respect to the cladding, the inflammable cladding that has been used inappropriately. It is important that they use their leverage to do so. It seems to me they want to regulate the building industry for political purposes but not when it is to do with public safety, so they need to do more there.

Finally on this issue, they need to tackle phoenixing. One of the reasons why companies act improperly, in fact even criminally is because they then wind themselves down, go out of business and restart somewhere else, removing the risk, removing the debt owed to creditors. There has been an effort by Labor to press the Federal Government to tackle phoenixing in this industry and yet we have not seen the Government since the election place in the Parliament any legislation to deal with phoenixing. It’s a problem across the industry and we need to tackle these cowboys in the industry that are causing potential problems. They are causing problems in not paying wages, in not paying other debts and indeed shonky products and indeed terribly dangerous products used on buildings and that’s one of the things the government could be dealing with as well.

And finally I just want to make the point about Senator Cash’s advocacy and promotion of a company that is under question in the training sector. As I understand it, Senator Cash recently advocated a company that has, according to the regulator, breached 16 clauses of their contract and have been suspended from enlisting any further students and are under examination, the matter I understand is going to the AAT. It’s quite remarkable, that happened three months ago and yet as recently as this week we had Senator Cash advocating in favour of that company, promoting that company, that training company and of course then sought to get away with it by deleting the social media message she sent out with respect to that company. Well I just say to the Minister, that is really very, very foolish and she should apologise to those who have been victims of the transgressions of that company with respect to training provisions. I just wanted to touch on that because I think that was important. Are there any other questions or comments you want to make?

JOURNALIST: Can I ask, on cladding, should the Federal Government contribute funding towards rectification works in Victoria? If so, how much and what about other States?

O’CONNOR: Look, I think the question of resources dedicated to this issue is something that should be determined between the Federal Government and the State Government. I am open to what both the Victorian Government and the Federal Government may say about those matters. But what I do know is that the Federal Government already has leverage, leaving aside whether they provide dedicated resources, they have powers. They have control over the importation of product, they have corporation powers which they can therefore leverage against the use of these products, they should be looking at introducing penalties. I think we could be looking at that.

As to whether there is financial support for the rectification, I think that is something that should be fleshed out between the Governments, in this case Victoria, and the Federal Government. And I guess on that occasion I am happy to hear what the Federal Government has to say about whether or not it should be involved in providing fiscal support, but it should be providing regulatory support. It has power, it can use power in a way to protect the interests of the public and protect the interests of the residents of those buildings and future buildings if indeed this continues. We need to stamp out the misuse of inflammable products, which lead to the very high risk towards those who are in the dwellings.

JOURNALIST: Also, what do you think about Newstart? Should it be raised?

O’CONNOR: I personally think that it must be very, very difficult for anybody to live on Newstart. I think it would be just extraordinarily difficult. So I firstly want to say that I am very empathetic to the plight of people who are reliant on a very low form of income to make ends meet. How you’re supposed to get yourself ready for work and be employable when you’re struggling barely to even feed yourself – possibly even put a roof over your head is anyone’s guess. So firstly I just want to say, that I’m deeply sympathetic to those who are recipients of a very low income.

Labor made a commitment to review Newstart and I think the Federal Government should take up that commitment we made. We didn’t win the election, but I think there’s a growing pressure as there should be, on the Federal Government to examine the level of income that we’re providing to our fellow citizens who are seeking to find work, with a view to ensure them that they can have just a decent life and an ability to be in a position to find work. When you’re unable to pay the most basic bills or even be able to properly dress yourself because you can’t afford new clothes, then it makes it very difficult to look for work even when you’re looking each and every day. So, I think there’s an economic benefit on top of the social need, for people just to be living and being able to pay for basic necessities.

JOURNALIST: On the figure, other Labor MPs have said that an increase of $75 a week should be the minimum increase.

O’CONNOR: I don’t have a dollar figure, and nor did we go to the election with one. But, I think the review should be relatively quick, there hasn’t been an examination. I’ll just say this, when last in Government Labor introduced a record increase to the pension, which also meant an increase to the Disability Support Pension. What we didn’t do at the time was increase the Newstart Allowance and the Youth Allowance, as attached to that. And I think it is well beyond time that the Commonwealth seriously examine the level of income afforded to people seeking to find work. We made that commitment, but if you have a review, you don’t prejudice the review with a dollar figure. But I have to say to you, I would expect the Government to consider, when you’ve got employer groups , you’ve got community groups, you’ve got unions, you’ve got stakeholders across the spectrum, the business community calling on an increase, I think it would be a good idea for the Morrison Government to show a bit of charity, and support and sympathy to people struggling to make ends meet and have that review and make a decision. And I think Labor would support them if they’re going to make a commitment to lifting a very low income.

JOURNALIST: Mr O’Connor, do you believe just in relation to superannuation, do you believe people should have the right to choose their own super fund regardless of what Enterprise Agreement they’re on?

O’CONNOR: Look, I think on the face of that it sounds like an ideal thing to do. What happens in the real world, if you don’t have regulation is, quite often the employer chooses the super scheme for the work force. For example, if there is no requirement for an agreed position between the employer and the workforce as to what scheme applies to them. It could well be the case that an employer chooses every prospective employee and tell them, if you want to start with me this is your super scheme. So, in the real world, I think it’s harder to ensure what seems to be a lofty idea that people make those choices.

But, I do think, with the Government, when they talk about choice you really do have to look behind their motive. We know that the Government for six years, has sought to undermine the most successful super schemes in the country. Because, those schemes have workers representatives on the boards of those schemes, industry schemes that is, which of course on almost every measure surpass retail schemes. The Government has been attacking industry schemes for six years, despite the fact that they’re the best performing schemes. So, I guess when I look at legislation in this space when it’s to do with this Government, I always look behind what is their motive. Is their motive to undermine industry super schemes, which are the best performing super schemes for workers? Or is it also to undermine unions further, is that its motive? Or is its motive to provide real choice?

So we need to work through how to provide the ability for workers to make decisions about their retirement savings without it not being a confected one. That is, you remove an enterprise agreement which is actually ensuring the employer puts in a very good scheme, and then an employer, subsequent to that, puts them in an inferior scheme because the employer has a relationship with that retail fund.

So I think it’s a really serious question. And I’m of the view that you have to protect workers to this extent. Yes, I think if you can ensure choice that’s good, but let’s make sure that employers don’t start diverting people to inferior retail funds because that’s the will of the Federal Government because they’re mates with those people who have those retail funds. I’d like to make sure that workers, whether they’re choosing or not choosing get the best funds available in their industry. And frankly, industry funds have shown to be far more successful; lower fees, higher returns. They get more of their money and they get better growth. Just because workers are representatives on those schemes, not bankers, shouldn’t be the reason the Government gets to undermine that system. It’s the best part of our superannuation in this country and we shouldn’t let it be undermined.

JOURNALIST: Conversely, will Labor consider supporting legislation about laws for enterprise agreements forcing employees into certain super funds?

O’CONNOR: Again, when you say “forcing”, enterprise agreements are actually one of the very few democratic things that happen in the workplace. Enterprise agreements are voted on by the workforce. Most other decisions are determined by the employer. So when you say that an enterprise agreement is compelling people to do certain things, I would say to you an enterprise agreement is an expression of a democratic decision taken by the workforce with an employer. Remember, the employers agree too. That is actually more democratic.

One of the biggest problems we have in this country is enterprise agreements are collapsing, bargaining is stopping. One of the reasons why wage growth is so low in this country is bargaining is not happening in workplaces. If we’re going to deter bargaining and enterprise agreements in workplaces, we’re going to see a further decline in wages, I would contend. So be very careful in discouraging enterprise agreements, particularly when those agreements are seeking, with the approval of the workforce, to get the best possible super scheme.

I think we need to examine this closely. The idea of choice is an important one but it can be a seductive one. Sometimes it may sound good on face value but if you dig deeper it may end up that employees just become beholden to what employers want to do with their super. I’m not sure that’s necessarily a good thing for workers, particularly if they choose a retail fund over an industry fund.

JOURNALIST: Can I get your reaction to the ruling from the Fair Work Ombudsman in Victoria regarding celebrity chef, George Calombaris who has received $200,000 fine on top of repaying close to $8 million of unpaid super and wages?

O’CONNOR: Anyone who’s involved in the underpayment of wages should be brought to account. Clearly, the agency, in this regard, has sought proper compensation for those workers and penalised the company, the employer, for acting improperly. I support any action taken in order to find the money back into the pockets of workers when they’ve been denied their income. And indeed, if need be, if appropriate, sanctions against an employer involved in systemic, long term underpayment of wages to their staff.

JOURNALIST: Is the penalty strong enough? I mean, if I rocked up doing that to a bank, I’d be looking at doing 20 years.

O’CONNOR: Well, the area of civil law is complicated. I’m more interested in making sure that firstly workers get their wages, and secondly, that there are civil penalties, sufficient civil penalties. I’m not about custodial sentences for theft for the sake of it – though that’s an important issue. I’m into ensuring that we have sufficient penalties. Indeed Labor did commit to increasing penalties against large employers and medium sized employers if they underpaid their staff, much higher than exists now. We think that will change behaviour. I mean the 7-Eleven example was the most classic case of  $150 million underpayment. Well, they should have been fined an enormous amount of money, but they were not because the laws didn’t apply to them and the laws don’t go to larger sanctions. So, with respect to this matter, we want the money returned to workers, we want penalties applied to employers. And I’ll say this, if there’s further, if there’s repeated offences, intentional misconduct, then I agree we have to start looking at higher civil penalties and potentially higher criminal sanctions.

Thanks very much.