Doorstop interview: Wage growth lowest in a generation

BRENDAN O’CONNOR, SHADOW MINISTER FOR EMPLOYMENT AND WORKPLACE RELATIONS: Thanks very much for coming. I just want to respond to the recent data out on wage increases in enterprise agreements and indeed the very significant fall we’ve seen in enterprise bargaining agreements since their inception in the 1990s.

What we’ve seen is enterprise bargaining collapse in this country with the lowest enterprise bargaining agreements struck since 1995.That really shows that the vehicle for improving opportunities for working people and indeed improving opportunities for employers is not working sufficiently. And that is one of the significant reasons why we are seeing the lowest wage growth in this country in a generation.

We’ve seen now the wage growth for those workers under enterprise agreements fall from 3.4 per cent last year to 2.2 per cent this year. You have seen the public sector workforce falling to 2 per cent and the private sector workforce falling to 2.4 per cent. This really shows that people are struggling to make ends meet.

When Malcolm Turnbull says he is doing everything he can, clearly the evidence says otherwise. We have a situation in this country where a Prime Minister, Malcolm Turnbull, provides his personal staff up to $30,000 wage increases per year and at the same time wants to see penalty rates cut for this year and next year and the year after that for low paid workers in this country.

We see a government that’s complicit in supporting those employers who choose to game the system – to terminate enterprise agreements to reduce people back on to Awards. Complicit in supporting lock outs of Australian workers for months on end and yet there are no answers provided by this government to ensure that working people are able to benefit from any growth that might be occurring.

So what we see, if you sum all of these things up, is a Prime Minister that is totally out of touch with what is going on. Tax cuts for billionaires. Tax cuts for millionaires. Tax increases for workers. Wage growth at its lowest in a generation. Enterprise bargaining agreements collapsing insofar as the numbers are concerned. And a Prime Minister who has just provided a huge wage increase to his personal staff whilst wanting to see the cutting of penalty rates to some of the lowest paid workers in this country.

So for that reason we say the government has failed. It’s failed its obligation to ensure that people’s cost of living pressures are indeed removed or indeed made easier by proper wage increases.

And if you look at the trend figures for inflation, according to the Treasury figures, and look at the projection of wage increases in the labour market you are going to see more people that will actually have wages fall in real terms over the course of the next two years. No answers from the Prime Minister. No answers from the Minister for Employment. No answers from the junior Minister for jobs and small businesses. No answers provided by the government.

All we see is tax cuts to their mates – billionaires, millionaires, and tax increases to workers, penalty rate cuts for low paid workers, and as I say a huge, huge pay hike for personal staff for the Prime Minister.

Happy to take questions.

JOURNALIST: Mr O’Connor, those pay rises were for senior public servants coming across to the Prime Minister’s office. They were to ensure they didn’t take a pay cut. Don’t you think that’s appropriate?

O’CONNOR: I’d say this now. There are certainly public servants that are from time to time seconded into the offices of Ministers, but when you choose to be a personal staff member of a Minister you accept the pay structure of that office.

These people are on hundreds of thousands of dollars a year. Indeed one of the personal staff of the Prime Minister is now being paid $600,000. That is well beyond a reasonable remuneration of a personal staffer of any Minister including the Prime Minister.

This is not about robbing anyone at all, but if you choose to take a different career path and want to become a political staffer, a personal staffer of a Prime Minister rather than being in the Department then of course you’ve taken a different path all together.

But it’s just against the backdrop, I have to say, that makes this obscene. It’s against the backdrop where wages are falling in real terms and have been now for some time. In fact the lowest wage growth in more than a generation. Enterprise bargaining agreement wage growth is collapsing. Enterprise bargains are not being struck sufficiently for the system to be working.

All of these things are happening. Penalty rates cuts will occur again, July 1 this year , July 1 next year, because the government supports that happening. All of that is happening and at the same time that is happening we see a Prime Minister find a way, find a sneaky way, to pay wage increases to already very well remunerated staff.

JOURNALIST: A similar thing happened under the Rudd/Gillard governments though. Is this different?

O’CONNOR: In terms of the extent and nature of this it is nothing like what may have occurred in the past with any administration, Liberal or Labor.

This is a Prime Minister who clearly wants to provide massive tax cuts to multinational companies and the big banks. He wants to provide tax cuts to millionaires while imposing tax increases on every worker between $21,000 and $86,000 a year. That’s about 80 per cent of the workforce. So tax increases for them, tax cuts for the rich and of course wage increases for his staff while he presides over a policy position that will enable penalty rates cuts for hospitality and retail workers.

Some of the hardest working, lowest paid workers in this country will be going backwards even when wage growth is falling they are going to lose real money out of their pay packets again on July 1 this year.

JOURNALIST: So the government says these 30 pay rises were across the parliament. Are you aware whether Mr Shorten’s staff or any Labor staff-

O’CONNOR: I’m not aware. I’m just making the clear point where are the priorities of this government and of the Prime Minister? The Prime Minister is supporting cuts for low paid workers. He is imposing taxes on 80 per cent of the workforce in the labour market. He’s providing tax cuts to the very wealthy and billionaires. And yet he has found a way to provide his staff very significant wage increase at a time when wage growth has collapsed.

I mean I can see on occasion you might make decisions about individuals that may occur. But what sort of Prime Minister, how out of touch need you be to provide huge pay increases to your own staff when workers in this country are going backwards. When real costs of living pressures are becoming so acute people are having trouble paying the mortgage, or paying the rent or paying the energy costs that are occurring as energy prices continue to hike.

So a Government that is completely out of touch. And the data today, Rob, shows that we’re seeing enterprise bargaining stall in this country and we are seeing the wage increases even out of enterprise bargaining fall below the projected inflation figures according to Treasury.

This is a recipe for disaster for working people struggling to make ends meet and the government needs to come up with some answers.

JOURNALIST: Would you be disappointed if you found out any Labor staffers had been given a pay rise by the Prime Minister?

O'CONNOR: Well if this has been sanctioned by the Prime Minister and led by the Prime Minister I think the censure should be directed towards him. I have no idea exactly the individuals, all we know is, according to the reports today, is the overwhelming number of people that receive these very significant wage increases are inside the Prime Minister's office.

JOURNALIST: On a different subject, the Chinese Embassy has tried to convince Labor MPs that they're not exerting influence Chinese students in Australia. Do you think it's useful for Labor MPs to engage with Chinese officials on this issue?

O'CONNOR: Well I'm not sure what that's about. Obviously we talk to all of the embassies of other countries as Federal Members of Parliament and also of course there is an ongoing informal dialogue with embassies, whether it be China or the United States or wherever, of course we talk to embassy staff. It's a very important relationship between Federal Members of Parliament and indeed the Government with Ambassadors and High Commissioners and the like, I am not aware of any problem with that.

JOURNALIST: Do you believe the Chinese Embassy has influence over Chinese students?

O'CONNOR: Well I haven’t read any reports about that, all I am saying is that people should be exchanging I guess, frankly and informally views that might be contemporary. I have no information in relation to that matter.

JOURNALIST: What do you make of speculation that Wayne Swan might be headed out of Parliament before the next election?

O'CONNOR: Well it's entirely up to him. Wayne has been a remarkable politician, has provided I think the Parliament and indeed Federal Labor a great legacy to date and if he chooses to continue in his role as a back bencher or member of the Federal Labor caucus, then he is most welcome.

In the last few years for example, even since he hasn’t been in the Shadow Ministry he has been taking up the debate about inequality in this country. This is the point we are discussing today. Inequality is at a 75 year high compounded by government policies making it worse, not better. And Wayne Swan has been leading the charge in many ways in relation to that matter and I think he has been a great form of advice, source of information and support for newer members of the Parliament.

So if he chooses to leave that is fine, that’s entirely up to him. The destiny of his parliamentary career is in his hands.

JOURNALIST: Just on Australia Day, are you backing calls by The Greens to change the date?

O'CONNOR: Look, that’s not Labor policy. I understand there are people who are upset about Australia Day. Some Australians of course, indigenous Australians, there is a sense of great difficulty reconciling the idea that that day is the day Australians would celebrate given they would perceive it as a very difficult day for them, for that reason I can understand the debate. I think the debate is healthy, I don’t think we should close down debate because people don’t like an idea, but at this point I don't think there are any plans in the future for Labor to be supporting any change to that day.

JOURNALIST: Is there discussion -

O'CONNOR: Can I just say, as a Member of Parliament, certainly from my own experience, it's been great to be able to welcome many, many people from around the world as Australian citizens on that day. Usually it is a great day of celebration.

In my own seat of Gorton, it’s a very diverse electorate and I have hundreds of people who have had bestowed on them Australian citizenship. So for me it's a beautiful day in that sense.

But I fully understand why it is seen as a day of hurt for our indigenous Australians and other Australians and I think the debate is a worthy one and we should not be trying to close down the debate.

JOURNALIST: Is it a debate going on in the Labor Party?

O’CONNOR: I think it's going on everywhere. We are always looking to reconcile the view of the nation, the sense of history. I think, for example we've closed our minds to a lot of things that happened in the past that we may now re-examine. I think when I was growing up and going to school we didn’t learn enough about indigenous culture, indigenous history to the point where I didn't fully understand as a young boy the sophistication and the real remarkable story, which is our First Australians’ story, and I think that's a shame.

I am glad to say that there is more focus now on our First Australians, but I think we should never close down debate about who we are as a people and that means having an ongoing engagement about our history and what it means, and interpreting history is a natural manifestation of democracy. If you are not allowed to speak out and argue and contest assumptions then you are not really living in a free democracy.

JOURNALIST: Do you think this position will impact Labor, say if Batman does go to a by-election?

O'CONNOR: Well I think that the people of Australia, including those that live in the inner suburbs of major cities are more concerned about whether their kids are going to get a job, whether they are going to get decent employment conditions, whether they are going to get decent wages to match the cost of living, match the prices that are rising too often.

They are concerned about whether they are going to get a decent education, whether they've got decent health care, and yes they too will have those discussions about our history and our interpretation of our history, but I think it's a whole package.

I mean The Greens Party is a party with no opportunity whatsoever to form government. They've got one member out of a 150 in the House of Representatives. It shouldn't be forgotten that through PR they have representatives in the Senate, but at the moment they have one member and they might double that number to two, I guess, but two out of 150 doesn’t make government. Sometimes I think people get excited about the opportunities the Greens Party seem to have.  I say that I am happy to engage with The Greens Party but they're not a government party nor will be.

Thanks very much.