Doorstop interview: ABS Labour force figures; Penalty Rates; Wage Growth

BRENDAN O’CONNOR, SHADOW MINISTER FOR EMPLOYMENT AND WORKPLACE RELATIONS: Thanks very much for coming. I just wanted to respond to the ABS figures today in relation to the unemployment numbers in December last year. It indicated we’ve seen an unemployment rate increase from 5.4 to 5.5 per cent. That is disappointing.

Whilst there are some jobs that have been created there’s been more part time jobs than full time jobs which also underlines the underemployment problem we have in this country with almost 1.1 million Australians looking for more work but not being able to find it. You add that to the well over 700,000 unemployed and you have 1.8 million Australians looking for some work or looking for more work and not being able to find it. That’s something that needs to be redressed by the Turnbull Government.

Interesting too that as the unemployment rate has increased, and whilst there has been some job numbers grow, we’ve seen the aggregate total hours worked for December 2017 fall by 4.2 million hours. So whilst there is a net increase to jobs, there’s been an unemployment rate rise to 5.5 per cent and there’s been a net fall in aggregate hours. That’s another part of the puzzle if you like to explain underemployment – more jobs but you have falling hours so people are struggling to find sufficient hours to make ends meet.

Now that’s combined of course with the lowest wage growth in a generation – for more than 20 years. We have the lowest wage growth and we have a government that is determined to cut low paid workers wages more. They are supporting a cut to penalty rates in July 1 this year the same way they supported the cut to penalty rates in July 1 last year. And indeed the cut in July 1 2019 is also being supported by the Turnbull Government. And we’re seeing tax cuts for multinational companies and banks. Tax cuts for millionaires, but tax increases for every worker between $21,000 and $87,000 per annum.

The priorities of the government are all wrong. The Prime Minister is absolutely out of touch. And these figures, unfortunately, should not provide sufficient confidence that we are going to see better days for 1.8 million Australians who are either underemployed or unemployed.

For that reason we need to see a jobs plan. We need better support by the government for the regions and indeed better, more precise arrangements with businesses to ensure we have industry policy in place. And that will I think also create opportunities. But the government has been deeply divided for too long – distracted from the main issues and not focused on growing the economy and providing that economy’s dividends to Australians across the nation.

Too often Prime Minister Malcolm Turnbull wants to find ways to provide more largess to his friends at the top end of town. Tax cuts for millionaires, tax cuts for billionaires, tax increases for workers. That’s’ not reasonable. Whilst the government has been crowing about the job numbers unfortunately today the unemployment rate has gone up which is a sober reminder that more has to be done to advance the interests of working people in this country.

Happy to take questions.

JOURNALIST: The increase is only minor, do you think the Government can take credit for figures that overall have seemed ok?

O’CONNOR: Well firstly there are more people lining the unemployment queues today than was the case when they elected in 2013. The Turnbull/Abbott government presides over a longer unemployment queue than was the case in 2013. 37,800 more Australians are on the unemployment queues than was the case almost five years ago. So that’s not a particularly good indictment.

Whilst we do welcome any growth to the employment numbers, we’ve done so in the past when it’s occurred, we also have to be very clear here, population growth is increasing. So it’s not enough just to grow job numbers, they have to be commensurate with the population growth. What we’re seeing of course is even with some of the jobs increasing in the December period last year the unemployment rate went up and that’s because not enough jobs were created when we have significant increases in our population.

So that’s why you need to look at the rate of employment. And that’s why it’s fair to say whilst there are jobs increasing, as you noticed, there’s not enough to stop the unemployment rate going up but more of the jobs were part time jobs rather than full time jobs. There are many Australians according to the ABS, almost 1.1 million Australians looking for more work but not being able to find it.

JOURNALIST: Can you explain why there are more part time jobs?

O’CONNOR: It’s combination of factors. Firstly I think there are people who seek to have part time work. It’s a reasonable and appropriate form of employment for many Australians. And it should make up the mix in the labour market, that's not a problem at all. People balancing work and family seek to maybe tend to their family or be primary carers for their children and at the same time still be attached to the labour market, and that’s ok.

But what we’ve seen over time is because of the changing nature of the labour market some of the areas of the old economy have been shrinking, including manufacturing, partly because the Government’s provided no support for manufacturing including the fact that they abandoned the car industry. Those areas of the labour market and the economy had full time well paid jobs. Some areas of the growing economy, people call it the gig economy or the new economy, do not have as many proportionately full time jobs as was the case for those areas that had been part of our labour market fabric for decades.

So that’s one of the reasons why we’re seeing part-time growth. The other reason we’re seeing this, is the bargaining power of working people in this country is skewed against them and towards employers in the main. That’s not to say that some workers are not doing well, but overwhelmingly we’ve seen bargaining power shift away from working people. That’s why we’re seeing wage exploitation and underpayment. We’re seeing precarious employment. We’re seeing people not being able to find secure work. Job security is the number one concern of all workers whatever job they are doing or occupation, trade or profession, they are concerned about security of employment.

So there is a combination of reasons and if the Government wasn’t so relentless in trying to destroy or attack the union movement and traduce its reputation, if it wasn’t so disinterested in the plight of working people I think you would see changes, improvements to the labour market.

Labor has already committed to making sure that we ensure the balance of power in the labour market is fair and reasonable and that way we will see better outcomes. In particular we will see an increase in wage growth which has been at a shameful low. It's the lowest in, as I say, more than twenty years and enterprise bargaining has collapsed.

The lowest enterprise bargaining agreements were struck in the September quarter than we've seen since 1995. So all of the indicators in the labour market in relation to wage growth, enterprise bargaining, job security, the increase in casualisation show that we need to do far better to look after working people in this country.

JOURNALIST: How much is the increase in part time employment coupled with the looming penalty rates cuts cause for concern?

O'CONNOR: Well I think the penalty rates cuts are an ongoing challenge for low paid workers. Retail and hospitality workers have already received a pay cut last July as a result of penalty rate cuts. Unfortunately they are about to be provided further pay cuts on July 1 this year and July 1 next year. That is really impacting on cost of living pressures for many families.

In some families both parents may be working and some of the kids may be working, if they can't find sufficient work and their wages are falling in real terms anyway because wage growth is at its lowest, and penalty rates are being attacked as well, the combination of those things means that we are going to see more households struggle in relation to cost of living pressures than we've seen for some time.

We are going to see that because we have a government that, on every policy prescription it considers, it always considers other interests before working people and households and that's a real problem. That is something the Prime Minister should understand and he should start listening, for once in his life, to working people.

JOURNALIST: Just on a separate issue if I can. There is a carbon tax compensation payment that the government is looking to scrap. They've missed their deadline of September last year but they've indicated that they're still looking to push that through the Parliament. How concerning is it the fact that it's been blocked once and they are still trying to push ahead with this cut to pensioners?

O'CONNOR: Well it's a great concern to Labor that would see the energy supplement cut in this country which would mean for all new single pensioners a cut of $14 a fortnight and for coupled pensioners $21 a fortnight. Now that may not sound like a lot to Malcom Turnbull, but I can assure Malcom Turnbull that $14 a fortnight for a pensioner is a lot of money. They are struggling now to make ends meet, to pay for energy bills and other increased costs that the government has not been able to handle or manage well. Now you add to that cuts to their income at a time when energy prices are going through the roof, it's a recipe for disaster for too many pensioners.

These are people, older Australians who have helped build this country, who just want to have a decent retirement and a decent quality of life and they deserve that. The idea that Minister Tehan and the Prime Minister think that it's reasonable to continue to seek to cut the energy supplement payments to pensioners and other Australians is quite frankly, obscene. It really does compound the problem that we already have in this country in terms of growing inequality between the very rich in Australia, and those people that worked all of their life and helped build this country, look after families, look after communities and now find themselves at the wrong end of a savage cut being proposed by Minister Tehan and the Prime Minister. What we would say to Malcom Turnbull is, stop attacking pensioners, stop attacking their quality of life and start understanding how difficult it is for them to live on this income.

JOURNALIST: Would you welcome closer defence and security ties with Japan?

O'CONNOR: Well I think we are of course a close friend of Japan, a major trading partner with that country and we have a close co-operation of course and we have a very strong relationship. But if there is an opportunity to improve our relationship or improve any co-ordination between our two countries then Labor would certainly welcome that. If the Government is considering any changes to the current arrangements, militarily or diplomatic or other arrangements then certainly we would examine that with an open mind and with a view, as I say, Japan is a good friend, and important trading partner and therefore of course we would be very positive with respect to that matter.

JOURNALIST: North and South Korea have decided to march as one team at the Winter Olympics. Is that an encouraging sign for this region?

O'CONNOR: Well I am not aware that they've made that decision. I understand that was an offer made by one to the other. As I understand those two countries have marched before together under a Peninsula flag, and did so at the Sydney Olympics and the Athens Olympics, so it's not the first time, but any example that they are looking to work together, reconcile differences, reduce risks to the Peninsula and to the region and to the world, that's a good thing. So of course we would welcome any sign of improved relations between South Korea and North Korea.

Thanks very much.