ABS employment figures; Wage growth lowest in a generation;

BRENDAN O’CONNOR, SHADOW MINISTER FOR EMPLOYMENT AND WORKPLACE RELATIONS: Thanks for coming. I just want to respond to the ABS figures that are out for last month’s unemployment rate. The unemployment rate in this country has risen, and so too has the unemployment number. There are more people unemployed according to these figures, according to the ABS. Unfortunately, the rate of unemployment has risen, and that is of concern to federal Labor.

We believe that despite the boasting of the government, the fact is there are still many challenges in the labour market that the government is not redressing. Indeed, the government should stop crowing about employment numbers, and should look at - for example - the youth unemployment rate, which has risen in excess of 13 per cent.

What we have been saying over time now is that the underutilisation rate - that is, underemployment and unemployment - is too high at 13.9 per cent. That is too high, and why people are struggling to make ends meet. 1.1 million Australians are looking for more work and cannot find it. That’s a record, and that’s something that needs redressing, and the government doesn’t seem to think it matters.

The government thinks that if a person has one hours work that’s sufficient for them to boast about. Indeed, the junior Minister who is now in this portfolio lives in this fantasy world that Uber drivers are making $100,000 a year. Well quite frankly, nobody believes the Minister when he talks about Uber drivers making $100,000 a year.

What the Australian public do know is that they are struggling to make ends meet. We have the lowest wage growth in a generation, flat lining wages, and we have growing precarious employment, and that of course is of concern to federal Labor.

So there is a lot for the government to be doing. Instead, all they seem to be doing is boasting about jobs growth - when in fact there are 41,400 more Australians lining the unemployment queues than was the case when we lost the election in 2013 - 41,400 more people unemployed since 2013. So there are some sobering figures for people to consider.

I think they do also explain why many people do not agree with the government’s rhetoric. And of course, the government’s only focus is giving a tax cut to the big end of town.

We have Malcolm Turnbull, former merchant banker, spending all of his time trying to work out how to give tax payers’ money in the form of a gift to the big end of town. $65 billion is what the government wants to provide to the corporate sector. He hasn’t explained how he’d fund the tax cut. No explanation as to where the money comes from, but we can be assured that it will come from cutting education and cutting health. Of course that’s their focus.

Now, I have to say it’s quite clear that company profits have been outstripping wages for a considerable time. In fact, profits are growing 8 times faster than that of wages, and it’s about time people understand that. Secondly, as for the BCA letter - quite frankly we don’t accept that the BCA has a strong, compelling argument for the cuts. Wage growth will not be delivered, and indeed we’ll see a further problem with the budget.

There is no good argument. The idea that a letter from a peak employer body to Senators should shift votes in support of that proposition is absurd. The idea that any Senator would believe it was credible that because a letter was sent to them giving an indication that somehow there might be some follow through on wages and wage growth quite frankly is absurd and fanciful, and I don't believe Senators are so naïve to believe that is the case. But frankly, of course Malcom Turnbull hopes that's the case. If it does happen, then we would say that is a very unfortunate set of circumstances.

I am happy to take questions.

JOURNALIST: The ACTU yesterday referred to industry wide bargaining, do you support that?

O'CONNOR: Look, I've already made clear that we are looking at what we do for very low paid workers who have got very weak industrial capacity. In fact, the Fair Work Act now provides for a low paid bargaining stream. But let's be clear here - as I said in a speech last week to Per Capita, the problem with the low paid bargaining stream is that it hasn’t worked. There's been no successful claim by low paid workers to bargain in a sector in the way in which that provision was envisaged, so we have made very clear we will examine that provision with a view to making sure it works.

Again, it was something that was in the Act. The ambition of the Act has not been realised for those workers, and of course we should review that provision because of its failure.

JOURNALIST: Just to clarify, you don’t have to be a low paid worker to be part of industry wide bargaining do you?

O'CONNOR: No, I've just explained the area of industry bargaining that we are focussing on has been the failure of the low paid bargaining stream inside the Fair Work Act to deliver for those workers. Because there has been no successful outcome for workers under that provision, we are examining that provision.

JOURNALIST: Business groups have promised to invest more in Australia if the tax cuts are passed. So speaking of joblessness, that surely would get the rate down quicker, wouldn't it?

O'CONNOR: Well business may say they are looking to invest more, but there is no requirement. If we provide $65 billion of tax cuts to big business, there is no requirement for them to employ any extra workers. That's the first thing I would say.

The very, very modest increase to economic growth would only commence after a decade if the legislation was enacted. There is no reason for us to believe that they will invest.

Now, that’s certainly different when we look at Labor's proposed investment guarantee. The investment guarantee to provide tax relief for those who invest in assets over $20,000 will in fact lead to improved productivity, and will, in fact, I believe, lead to growth - because it's a mechanism that requires that form of investment.

The problem with the proposition that's before the Senate - that is the tax giveaway - is there are no mandatory requirements of business to do anything in lieu of receiving a corporate tax cut. That's the difference between Labor's approach and Malcom Turnbull's approach.

JOURNALIST: You guys are considering reforming the industrial relations system, how do you think that will create jobs and investment and bring down unemployment?

O'CONNOR: Well there's a couple of things there. We are looking firstly at reforming industrial relations to ensure people are treated decently and get a decent job. It's not just about a job, it's about whether you've got a good job.

Now of course, it's important to have any form of employment - but, for the Liberals, just having a job, whether it's casual or not, whether it's fixed term or not, is sufficient.

For Labor, we want to see people decently employed wherever possible - securely employed, so that they have a capacity to look after their family. To get a home loan – which you cannot get, or it’s very hard to get as a casual employee.

We have to look at the IR system and ask ‘What is happening?” Well, what is happening is that wage growth is at an historic low. The lowest wage growth in a generation. Therefore, we should be looking at the framework of the IR laws to see whether in fact they are sufficient in order to see a real wage rise for workers in this country.

That why we have outlined at length the reforms that we are considering - whether they be about labour hire, whether they be looking at a new definition of casual, whether it be looking at the way sham contracting continues to happen, or whether it’s about phoenixing of companies where people rip off workers entitlements.

We have been announcing these policies well before the 2016 election, and we will have more things to announce leading up to the next election.

As for making sure things are fair – of course we want to have a productive labour market. You do that by treating people well, ensuring that people are decently paid, not ripping them off.

What we have at the moment is profits outstripping wages growth, enormously. It’s not right when profits are up and wages are flat-lining. It’s not right when we have productivity growth, and no wage growth.

There is a nexus broken between wage growth and productivity, wage growth and profits, and it’s something we want to attend to.

Malcolm Turnbull has no interest in looking after workers. He doesn’t really understand the pressures that workers are under. He just doesn’t get it. It’s clear from his priorities - they are never about working people. It’s never about wage growth. It’s always about looking after the big end of town.

JOURNALIST: Will Labor support the business tax cuts for small businesses turning over $10 million or less?

O’CONNOR: We have certainly made a commitment to a tax cut for small businesses with a $2 million turnover or less. We are happy to examine those things, we have made no further commitments than that.

What we are concerned about is the overwhelming proportion of the $65 billion will be going to big banks, multi-national companies, and big corporations. They are not going to small businesses. As I say, we have made a commitment to the small businesses in this country that employ up to 20 people - and that’s our position to date.

We are very much opposed to spending $65 billion of tax payers’ money to provide as a gift to big corporations, who have no requirement to either employ more people or increase wages.

There is no mandatory requirement for that to happen, and the letter that has been provided by the BCA to the Senators, quite frankly, does not hold water. It’s not credible, and it doesn’t require companies to do anything.

JOURNALIST: What’s your view of the possibility of putting a new tax on parcel deliveries?

O’CONNOR: It’s just another tax grab by the government. For a government that continues to talk about lower taxes, they seem to find more ways to increase taxes.

Here we have a situation where people who want to send parcels around the country are going to get an extra tax. Workers who earn under $87,000 as a result of this government – 75 per cent of workers are going to be taxed as a result of this government. And the big corporations are going to get a tax cut.

That is the world in which Malcolm Turnbull lives – tax relief, tax gifts for big business, tax increases for workers, penalty rate cuts for workers, and indeed, taxes on parcels. Well, the government can’t keep talking about lower taxes when they keep imposing taxes on workers, or imposing taxes on mail.

JOURNALIST: Do you think Daniel Andrews is facing the pressure, sorry let me re-phrase that. Do you think the MPs who took advantage of the scheme to pay for campaign staff in the Victorian State election through electoral office funding should be forced to step down?

O’CONNOR: I am not aware of the detail of that, I’ve only heard that there is a report out on the way in which money was expended. You really have to ask either the Labor party directly or speak to the Victorian Government. It’s not something I am across. It’s not something I have entertained today. I have been focusing on the job numbers today.

The job figures came out today, it’s my job as Shadow Minister to hold the government to account, and quite frankly, we are concerned that under-employment is rising, unemployment is rising, and there are more people unemployed today than was the case when they were elected in 2013.

We have a Minister running around telling everyone that they can get an Uber job that pays $100,000 per year – he is in fantasy land, quite frankly.

JOURNALIST: Wasn’t it a bit hypocritical though to have Victorian Labor use a very dodgy funding model to employ -

O’CONNOR: I have already answered that if you want the answer to your question you have to direct it to the party directly or to the Victorian Government.

Thank you very much.