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Read all the latest news from Brendan O'Connor MP


May 16, 2019


ZENGERER: Brendan O’Connor, how many workers will lose their jobs if you give them a pay rise and reverse cuts to penalty rates?
O’CONNOR: Nobody. Nobody loses jobs. In fact COSBOA the small business employer group just recently, two weeks ago, Peter Strong said that in fact there has been no evidence that there’s been job growth as a result of cutting penalty rates. We know Scott Morrison voted eight times to cut penalty rates. So what we have in Launceston and around Tasmania are thousands of retail, hospitality and fast food workers who had their wages cut in real terms, so their wages are going backwards.
More broadly across the economy, we’ve got the lowest wage growth in our history on record. And for that reason we need to see wages rise. We don’t just say that, Labor doesn’t just say that, the Reserve Bank Governor has pointed to persistent low wage growth as an economic problem, not just a problem for workers. And that’s why Labor has a whole series of reforms to lift wages and also to make jobs more secure because people are feeling anxious about job insecurity.
ZENGERER: Ok, have you considered though how that will impact on small businesses in regional areas? If you’re running a business in Scottsdale or Smithton you operate on a very small margin what will the impact be of wage rises if you employ workers on an award for example?
O’CONNOR: Well, workers are customers and consumers. And if they can’t see any increase, in fact if their wages are falling in real terms, if they are digging into limited household savings or in fact going into debt to purchase things what will happen to small businesses? In fact what is happening to small businesses, because we are suffering an anaemic economy, is that fewer goods and services are purchased in those businesses.
It’s not in the interests of small businesses for customers to have their wages go backwards. It’s bad for the economy and indeed it’s bad for consumption. So 60 per cent of our economy is household consumption. When people feel the pinch, when they can’t make ends meet, when they can’t pay for the essentials, put food on the table or put petrol in the car, or are having real difficulty because of low wage growth then it has a direct impact on businesses large and small.
ZENGERER: Ok, but have you mapped what the impact will be of your proposed wage rise and reversing of penalty rates cuts to small businesses in regional areas.
O’CONNOR: Well, as I just said to you, when you remove, take wages, out of the pockets of workers, when wages aren’t flowing they don’t consume goods and services. The Reserve Bank Governor has said that. There are 100 expert economists who have written a public letter most recently, only a month ago, saying we have a real problem in the economy with low wages.
And Catherine, it’s not just low wages. We have a problem with growing insecure work. We have a high proportion of Tasmanians and indeed Australians who are on precarious work who cannot find guaranteed hours. They are waiting by their phone to get a text message as to whether they will work for their labour hire company the next day. We need to not only look at lifting wages, we need to make sure people have opportunities to get permanent work because what’s happening is increasingly, as a result of the inaction by the Morrison Liberal Government is that people cannot find sufficiently secure work. And that is changing the labour market fundamentally.
ZENGERER: Ok, when the Fair Work Commission made that decision to approve, or to cut those penalty rates, they actually linked that decision for the first time to employment outcomes because they did take into consideration the fact that when small businesses in particular have to increase wages that they often have to lay off staff. That’s insecure work isn’t it?
O’CONNOR: That’s not insecure work. And what has happened since July 1, 2017, when the decision took effect to cut wages, wages went backwards. Now I’m not talking about wages not growing, they are taking money off pharmacy, fast food, retail and hospitality workers in Launceston and across Tasmania and around the country. Now what has happened since then is three weeks ago the employer group who represents Small Business, Peter Strong said there is no evidence of any employment in small businesses as a result of cuts to penalty rates. The fact is that has never been the case. And why should it be at a time of the lowest wage growth on record in our history in this country that hardworking low paid workers have their wages cut in real terms. I don’t think anyone of your listeners support that proposition.
ZENGERER: Ok, on Mornings ABC with Catherine Zengerer we’re are speaking to the Shadow Employment Minister Brendan O’Connor who is the latest politician to turn up to our Launceston studio. I think the south is feeling a little bit neglected Brendan O’Connor. I don’t think we’ve had many people turn up to the south of the state.
O’CONNOR: I love Hobart. I wish I could be in Hobart too. I love Hobart, I’ve been there many times. But as you know it’s the political reality, you fight in parts of the country and that’s part of it. But can I say the policies that I am advocating, that Labor is advocating, that Bill Shorten is advocating is for of course the entire country. We need to see wages grow again. We need to make sure that there is more secure work for people. We think that is good for the economy, but it is good for the quality of life so people are not so anxious because they just can’t get secure work.
ZENGERER: But the Business Council of Australia’s Jennifer Westacott says what the economy needs is business confidence and she says that in fact if economic growth had a three in front of it instead of a two we would see wages double. Don’t you agree that what we need is business confidence? How does Labor think they are going to get business confidence?
O’CONNOR: Well, I get on well with Jennifer but she represents the largest businesses in Australia. The fact is that profits are growing five times faster than wages in Australia. See there was a time when productivity was increasing and profits were rising and workers got their fair share of that dividend. That’s not happening. That’s why your listeners who work would know that they feel the cost of living pressures acutely because their wages are not rising and yet profits are rising faster. So what we want to see is just a fair share. We want businesses to prosper, of course we do. We want them to be profitable. We do. But we want workers to share in that productivity, that growth, those profits, so that it’s a fair go, a fair deal for everybody.
ZENGERER: Tasmania has the highest unemployment in the country, in March at 6.5 per cent, the national rate is 5 per cent. How many jobs is Labor going to create in Tasmania?
O’CONNOR: Look, as I say, it’s about growing the economy to allow for businesses to employ people. One thing I do agree with Jennifer Westacott is when she says business confidence is low. Well, the Liberal Government has been in government for six years in Canberra. They have low consumer confidence, that is partly due to persistently low wage growth, low business confidence, that means people are not employing people. Now I can’t precisely point to you an exact amount, but I can say this, when last in government, even confronting a global a Global Financial Crisis, Labor’s growth in employment was very high. In fact our unemployment rate back then was lower than Britain, lower than Canada, lower than the United States. At the moment our unemployment rate is higher than all those three countries. So I think we have a good record on growing employment when in office.
ZENGERER: Ok, just quickly, the Australia Public Service Commission was directed to cap job number at 2006/7 levels. A lot of places like Centrelink have been getting around that by using labour hire companies. Will Labor lift the cap on public sector workers?
O’CONNOR: That’s a very good question. We are lifting the cap and in fact we are also replacing, when we can if elected, labour hire workers for direct employees. We don’t believe many of the jobs undertaken by the commonwealth should be done by precarious labour hire workers who are paid less than others, so we are looking to certainly lift the cap on that. The government has really torn through the public service and slashed and burned a lot of things in Canberra and we need to restore a good public service. But also we want to invest in schools and hospitals. And this election is also about do you want to give cuts to the big end of town or do you want to invest in schools and hospitals? We choose the latter.
ZENGERER: The CPSU says 3750 jobs around Australia have been privatised by Centrelink and Medicare alone. A lot of those jobs have gone to contracts with private companies. What’s your plan for those contracts?
O’CONNOR: We have already announced, in certain areas already we’ve announced, we would be looking to replace the contractors, consultants or labour hire employees, with permanent jobs. And also we are introducing a labour hire policy more broadly that will apply across the labour market which is to say this: if you are a labour hire employee and you work in a workplace and you are paid less than direct employees that won’t be lawful under a Shorten Labor Government. We are going to make sure that if you do the same work, you get the same pay.
At the moment, Catherine, in Tasmania you have labour hire workers who are working side by side with direct employees and being paid significantly less than those workers. That’s unfair, and we will certainly introduce a policy that will lift those wages so they have to be paid no less than direct employees.
ZENGERER: Brendan O’Connor thanks for joining us this morning.
O’CONNOR: Thanks very much, Catherine.