Sky News AM Agenda (37)

31 January 2018




SUBJECT/S: Bill Shorten’s National Press Club speech; industrial relations; Labor’s plan for inclusive growth; minimum wage; private health insurance


KIERAN GILBERT: Some discussion now on Bill Shorten's address to the National Press Club yesterday. With me is the Shadow Finance Minister, Jim Chalmers. Mr Chalmers, thanks for your time. Let's look first of all at the IR discussion prompted by your Labor Party leader yesterday. Is it true though that much of the IR framework was put in place by the former Labor Government under Julia Gillard, of which Mr Shorten was a workplace minister?


JIM CHALMERS, SHADOW MINISTER FOR FINANCE: One of the big problems Kieran, that's emerged in the last couple of years, is we're seeing this undermining of enterprise bargaining, which means that, to an increasing extent, companies are tearing up agreements that are made with their workers, so that workers are forced onto lower award rates. That's just one of the problems that has really been turbocharged in the last year or two. And a very good point that Bill made yesterday was when you look at the economy and you look beyond the headline figures, what we're seeing are very stagnant wages, harder and harder to live on the minimum wage, more and more people forced onto the award rate, more and more undermining of enterprise bargaining. I think in that very good speech that Bill made yesterday, he was reflecting the very genuine, very real concerns that people have out there in middle Australia that their wages just aren't keeping up with living costs.


GILBERT: Your suggestion that there's been an increase, an uptick in employers ripping up enterprise bargaining agreements. That's disputed by business and industry groups. They say that that's not the case, and that the cast bulk of any agreements that have ended through this process have been at the end of their life; that they're not simply moving to rip them up mid-term, as was implied by Mr Shorten yesterday. 


CHALMERS: It wasn't just implied by Bill yesterday, he cited some facts which referred to, I think, the doubling of this behaviour over a year or two. So I would dispute that view. It's obviously important for business to have an input into the policy conversation in this country, but we don't have to agree with everything that they've put forward. Our job is to represent all of Australia and one of the main issues driving a lot of the insecurity in our labour market at the moment are those stagnant wages; as is the undermining of enterprise bargaining - things like labour hire practices, the cutting of penalty rates by Malcolm Turnbull. All of these things together are really turbocharging people's anxiety about life at work, and we're the Labor Party and we represent all of Australia, but especially the working people of this country. It's our responsibility to get those settings right to improve them where we can.


GILBERT: But the settings you would concede were put in place, the vast bulk of them, the ones that you're concerned about now, we're put in place by Labor.


CHALMERS: I just cited a whole range of things that weren't done by us; the cutting of penalty rates, for example. Where there is a need to change the system, we've identified some of the problems that have emerged over the past couple of years under Malcolm Turnbull and the Liberals.


GILBERT: Do you feel that the Labor Party has enough of an agenda in terms of growth, though? Because it's fine to be focusing on the "left behind society" as Mr Shorten put it yesterday, but where do you achieve economic growth within you're economic model?


CHALMERS: It's one in the same, Kieran. I'm glad you asked that. I think what Bill showed yesterday is we're not just sitting around waiting for Government to fall in our lap because Malcolm Turnbull's hopeless. We're actually doing the policy work; we're determined to lead the policy conversation. And when it comes to economic growth, the Government wants us to believe that if you hand $65 billion to the top end of town, it will miraculously trickle down to everyone else. That's a broken model of economic growth. It won't give us the inclusive growth that we need in this country. Our alternative is very different, and what we say is that growth in this country has to come from the bottom up. It has to be people powered, and that means a couple of things. The first thing is we shouldn't be cutting education and training. We need to invest in people, because that's where you get productivity, and that's where you get economic growth. But you also need to have demand in the economy. A lot of the weaknesses that we have in our economy at the moment, whether it be wages, or saving, or household demand, are a consequence of the fact that people's wages aren't keeping up with living costs. And so people don't have the disposable income to spend in the shops, or to invest in their future, or to provide for their families, and that has consequences for economic growth. We have a different model of economic growth; we think one that is more likely to succeed, by investing in people, investing in skills and infrastructure and productivity. Not persevering with a model that hasn't worked around the world and won't work here, which is to shovel largesse at the top end of town and hope everybody else miraculously benefits from it.


GILBERT: Where would you like to see minimum wage then? The Opposition Leader spoke of a "living wage". Unions I think from memory talking about 60 per cent of the average wage. What's your view of where that should sit? Is it affordable for business and employers who provide the jobs that we desperately need in the economy? Is it affordable to lift that minimum wage so significantly, to have the "living wage" as Mr Shorten put it?


CHALMERS: I think it is possible to responsibly lift the minimum wage. The total amount of that, and the total extent of that, is of course subject to a whole process via the Fair Work Commission with input from all sectors of the economy, which is a good way to go about it. I think Bill made the very simple point yesterday that it's harder and harder to live on the minimum wage. We do have an increasingly unequal society, and one of the tools we have at our disposal in industrial relations is the minimum wage. We want to make sure that people aren't left behind. We want to make sure that people can provide for themselves, and also spend in the economy so that we can get the growth that we need.


GILBERT: You're looking at the same time as not committing to passing on tax cuts to many of those businesses who would be facing an increase in the wages bill; no tax cut, on the other hand. How do you maintain the jobs growth that the Government has seen over the last year? That has been significant jobs growth. How would you maintain level of jobs growth when you're saying "OK, your wages bill's going up and you're not going to get a tax cut on the other hand"?


CHALMERS: There was a fascinating study this morning, Kieran, in the newspapers, which referred to the fact that a very large chunk of the jobs that have been created in the last little while were the consequence of Labor's National Disability Insurance Scheme. So there's a whole range of reasons why some of those jobs have been created. Despite all of the backslapping and self-congratulation from Morrison and Turnbull, it's not all the Government's doing. And there's also, of course, still a lot of underemployment and insecure work in the economy. But I've just gone through our different approach to growth, job-creating growth, inclusive growth. That means making sure that people have the skills to work. That means making sure that people have the disposable income to spend in our shops and support our small businesses, our retail sector; all of these sorts of things. This is a far more likely-to-succeed model of economic growth. It's the one that we're about in the Labor Party. The Turnbull-Morrison way won't work. Our way is fairer, and more likely to succeed.


GILBERT: The other focus yesterday, one of the big ones, was on private health insurance. That industry's also reacted quite fiercely yesterday in response to the arguments made, although Mr Shorten this morning ruling out changing or scrapping the private health insurance rebate. They welcome that development. So where do you turn then? Do you just simply refuse any premium increases over coming years if you are elected?


CHALMERS: This is a huge issue, Kieran. You can talk to anyone in my community or around the country, and this is really front-of-mind for a lot of people, these big increases in private health insurance premiums. Obviously there will always be a role for private health in our mixed system. As Bill said, as Catherine said yesterday, we don't intend to scrap the private health insurance rebate. Our concern, which is really the concern shared right throughout middle Australia, is that the balance has shifted too far in the direction of the big insurers and too far away from the average consumers. They can't understand why, in an industry that is returning very big profits, an industry that is very well supported by the Government and the taxpayer, why we see these enormous increases in private health insurance fees. That's a legitimate concern that they have, and Bill is reflecting those concerns in his remarks.


GILBERT: Mr Chalmers, we're out of time, we'll talk to you soon.