KEYNOTE ADDRESS: FINNEGAN-RUDD DINNER

I’d like to acknowledge that we are meeting on the traditional country of the Awabakal and Worimi peoples. I pay my respects to the Elders both past and present.

I also recognise and respect their cultural heritage, beliefs, and continuing relationship with the lands, and that they are the proud survivors of more than two hundred years of dispossession.

Thank you for inviting me to this year’s Finnegan-Rudd Dinner – what is sure to be a fantastic celebration of 40 years of the Newcastle Branch.

I’d like to personally thank Maurie Finnegan and Maurie Rudd, two former Branch Secretaries of what was then known as the Federated Ironworkers’ Association in the Hunter Region. Both Finnegan and Rudd are no longer with us, but the fruits of the labours remain an inspiration to us all. 

I want to take you back to the hostile industrial relations context in which they worked so ardently to overcome the barriers of contempt and distrust in the workforce that characterised so much of the 1970s and 80s. Through facilitating discussion between stakeholders and participants, better industrial relations were firmly established, and the benefit of the hard work they did then continues to inform the work of great civic thriving organisations such as the NSW Industrial Relations Society.

There are a few other people I’d like to acknowledge, whose labours are very much in play right now.

Just as Finnegan and Rudd overcame the IR challenges of their time, it falls to us to rise to that same challenge in our own time, in ways that are appropriate to our time. 

There is stress and anxiety being experienced by current workers, and our future workers – our young people in schools, TAFE and university – about what jobs will look like in the future. What skillset will be demanded by employers? What skillset will be supplied by workers? Will these match-up?

And, this uncertainty is occuring in a landscape whereby the Australian economy under the Turnbull Government is not delivering for our workers.

Wage growth remains at a record low, and so too does morale. The cost of living continues to rise, and pressure on workers and families is setting in.

Not only are Australians underpaid, they’re also working less than what they would like, that is, they’re chronically underemployed.

It’s clear that hardworking Australians that keep our economy prosperous are forgotten by the Turnbull Government and they are, sadly, being left behind.

Being in Government is all about choices and priorities.

We know that the Turnbull Government will always choose their mates in the top end of town, while Labor will always choose a fair go for all Australians.

The Turnbull Government will always prioritise tax cuts for multinationals and millionaires, while Labor will always prioritise secure employment, funding our local schools, skilling our future workforce and protecting working Australians.

My message today to all of you is simple: workers are feeling the brunt of changes in technology, record-low wage growth and insecure employment; and the Turnbull Government is doing nothing to stop this; in fact, they’re making the situation worse by continuing with their one trick pony – the trickle-down economics agenda.

I propose colleagues to spend my time with you this evening talking to you about:

There is no doubt that the Australian economy is undergoing structural change, or the fourth industrial revolution as some put it.

Every day, we read another article about how technological advancement will cause robots to replace workers – a reduction in the demand for routine, manual tasks such as bookkeeping.

Currently, rapid technological advancement is causing the labour market to change what it demands from our workers. The nature of work is changing, which means the nature of our workforce has to change.

The rise of automation and technological disruption can pose a threat to worsening inequality including a

rise in structural unemployment and an increase in insecure work.

Challenges

This presents challenges.

This presents challenges for current workers who may be displaced.

Take an older worker, who has been employed in one career for life, whose job is now being replaced by capital – where do they go now?

This presents challenges for future workers who are uncertain as to their career pathways. 

For workers whose identity is inextricably entwined with their work, disruption is often a blow not only to their economic capacity and security, but a blow to their identity, their natural community connections, and a blow to their mental health and to their relationships.

It’s hard to turn from being a forestry machine operator into a tour guide – even with great re-training.

 We know our young people are our most educated generation. Their work identity is being formed not disrupted, but securing full-time work and economic security is much more difficult for them than those who parented them.

The Foundation for Young Australians 2018 New Work Order Report found that 60% of young Australians aged 25 hold a post-school qualification but half of them are unable to secure more than 35 hours of work per week.

And, this presents challenges for decision makers, for our union movement and for our Labor party.

There are questions for us on how people at the bottom end of the labour market can be reskilled.

There are questions for us on how to ensure a generation of workers are not simply displaced.

There are questions for us on how to ensure the benefits of technological advancement are not concentrated amongst a few.

Clearly our immediate task is a harm minimisation one. Straight up we must work now to minimise any negative impacts that disruption has on individuals, regions and industries.

But the scale of the ongoing redress of the inequality is growing by the day. There is a mountain of economic and industrial relations challenge growing daily before our eyes.

Let me put it this way.

At a micro level, behind each job replaced is an individual – perhaps a retail worker or hospitality worker with a family and children to look after.

These are individuals who are looking to leaders, to unions, to governments – for answers on how to make sure this disruption does not adversely impact their lives and certainly when adverse disruption occurs that its impact is short-lived.

At a more macro level, moral, social and economic reasons demand that we work to prevent the emergence of a generation of people without the ever rapidly changing skills they need in order to be able to secure stable and valuable work.

From a moral perspective, it’s simply right that each individual has access to employment opportunities. For a country as prosperous and developed as Australia, anything less is simply unacceptable – at least to those gathered here tonight. But there are other world views out there as we all too well know.

From a social perspective, our social cohesion will be disrupted if workers cannot secure employment. Again – others will say that this is not the work of unions or communities of concern or indeed the work of government. 

But there is a national cost when the social reality elements of a social democracy are displaced. 

We know, each of us here tonight, that a lack of work or insecure work and associated inequalities, or even merely the perceptions of their existence; can adversely affect perceptions of well-established institutional structures.

Internationally, take a look at the rise of populism in the EU, ‘Brexit’, and US with the election of Donald Trump. But, we do not even need to look offshore to see this sentiment perpetuating and operating.

On our own shores, the rise of the voting share of first preferences to minor parties has been discussed for some time now … and it is continuing.

From an economic perspective, a lack of access to employment opportunities will obviously hamper economic growth, particularly as our population – that is, our human capital, our labour, our workforce – is not being utilised to its full capacity.

Opportunities and Labor’s record

These challenges present us with opportunities; opportunities which our union movement and our Labor movement can and must tackle.

Because, the story of technological change does not have to be about job destruction and increased inequality, it can be one of job creation or job re-allocation.

Automation and technological advances are good for society and the economy. Let’s not forget that innovation is an essential driver of productivity, wage growth and economic growth – and rising living standards for all Australians.

But, if a government, like the Turnbull Government, is making decisions that does not think about the distributional effects of innovation – the benefits of innovation will be concentrated to the top end of town.

This is why who is in Government matters.

This is why the decisions of governments as to the settings of the tax and transfer systems or the existence and quality of and access to education services matters.

We need to ensure that innovation does not cause long-term structural unemployment and improves income inequality. To do this, we need be able to adapt to skill-biased technological change.

To that end – a critical plank in our IR policy as a nation must be our capacity to educate, to train, to re-skill, to support and re-engage our fellow citizens in the worlds of work that are constantly changing and at a pace we have never seen. That means Australia needs an education system that produces skilled men and women who are well trained and capable of performing in the jobs of the future: high-technology and high-skilled.

With a Labor Government it is simply a historical fact that Australian schools have benefited from policy innovation and investment. It’s just a fact that Australian schools have a brighter future, with better and more targeted funding, outstanding teachers, and great results under Labor.

Labor is clear about the social and the economic value of investing in the workforce of the future. We are the party that drives policy that reveals our general community beliefs that kids should get more individual attention, and more help with learning not only the basics they need in the future such as reading, writing, maths, science, and coding, but the emotional literacy, the spiritual resilience and the social orientation to cohesive community that will help them weather the storms of change that will be a reality of their lives.

That’s why Labor will restore every dollar of the $17 billion the Turnbull Government has cut from schools.

Labor will also conduct a once in a generation inquiry into the post-secondary education system to commence within the first 100 days of a Shorten Labor government.

Labor will make TAFE the centrepiece of our training system – by ensuring at least two thirds of training funding goes to TAFE, scrapping upfront fees for 100,000 TAFE students, and investing $100 million in a fund for new TAFE buildings.

 

We also need to look beyond our education system.

Workplace laws must keep pace with the growth of the gig-economy and other forms of on-demand work, to ensure that the jobs of the future are secure and well paid.

This is why Labor is committed to maximising opportunities for Australians to be employed in secure, high-wage, high-skill jobs.

You would have seen on Monday Labor’s Minister for the Digital Economy and the Future of Work announce Labor will commit to invest $3 million to help establish a National Centre of Artificial Intelligence Excellence.

Ed Husic made clear that Labor would engage with stakeholders to agree how this funding can best be used to support research, advice and industry acceleration.

And this includes our unions – we need to draw on your knowledge on how to ensure we best know the impact of technology on jobs, on workers and how to best prepare ourselves for this change.

In our proposed national policy platform for consideration and assent, and recently adopted at NSW State Labor Conference our ethical AI policy statement is a vital element of discernment about the need for constant and careful monitoring of the AI developments that will inevitably continue to emerge. 

Secondly, I want to put a few words on the record around the nature of business structures and their impact on the nature of work. 

Let me start with an observation about the latest CEO pay report from the Australia Council of Superannuation Investors that shows the extent of wage inequality in Australia. The report shows that the pay for company bosses is at its highest in 17 years. This is while, as I said initially, the average worker endures wage stagnation.

Topping the list of the highest paid ASX200 CEOS last financial year, earning a staggering $36.8 million was Don Meij, the CEO of Domino’s Pizza Enterprises, a company that has been embroiled in recent franchise scandals, and faces scrutiny in the current and on-going franchising inquiry.

The Parliamentary Joint Committee on Corporations and Financial Services is currently conducting an inquiry into the franchising industry. 

As Deputy Chair of the Committee and Labor’s lead, I have heard many abhorrent things: exploitation, wage theft, and a general gross misuse of power.

Domino’s has been accused of wage fraud and visa scams. Don Meij told the Senate Inquiry that despite being able to observe point of sale data every fifteen seconds, he can’t guarantee that the workers at any Domino’s store are being paid legal wages. How on earth did we get to this point – where a CEO is quite happy to put that on the record in a public hearing of a committee of the Australian Parliament?

Meij passes the buck, as so many in his financial position do, and insists it’s the franchisee’s responsibility to ensure and regulate wages for workers.

This kind of laissez-faire attitude only encourages inequality and inequity. You would all be familiar with it. We can never forget the 7-11 hearings – I know that you all know it very well.

I want to take the opportunity to acknowledge the national leadership role played by the SDA.  The Northern SDA Branch were amazingly effective in gathering evidence and building the public case that was critical to generating action. 

The findings of that inquiry forced the government, kicking and screaming to the Protecting Vulnerable Workers legislation.

But, in typical Liberal fashion they carved out Labour Hire, supply chains and contracting chains. 

As they always do, the Turnbull government did the bare minimum in response to the outcry lead by the SDA, the union movement and the Labor team on the Education Senate References Committee. 

In similar vein, the Committee I am leading has heard a number of allegations of misuse of power by franchisors.

The nature of franchising dictates that each party’s obligations and duties are ongoing and variable – largely at the discretion of the franchisor. This inherent asymmetric power dynamic within these agreements favours franchisors, and leaves franchisees scrambling to sustain their business, and support their employees.

The starkest has been the evidence from a number of franchisees that they are actually being encouraged to underpay their staff.

This is on the public record.

Take the example of former Muffin break franchisee, Faheem Mirza. He told the inquiry he was encouraged to consider underpaying staff that he could trust. He says that, as a migrant, he was encouraged to employ other migrants or students who were desperately seeking employment, and underpay them. The lure of their first job would eliminate the desire to report underpayments.

Mr Mirza says “if I were able to exploit my employees, I could generate a profit.”, then, and only then, could Faheem profit from his business.

Whilst at this stage this is merely an allegation, this story is on the public record – and stories like Faheem’s are, sadly, not uncommon.

But not all stories are on the public record. In my many years as Deputy Chair of this committee I have never had so many people too frightened to put forward evidence, let alone attach their names to it. The number of confidential submissions received has been unimaginable.

It’s clear we need strong, considered, and effective action. The ongoing inquiry into franchising is just the beginning for workers in Australia. There is still a long way to go before we have solutions and solutions in practice.

I hope my remarks have outlined for you this moment of profound industrial relations challenge.  It is huge, and it can be overwhelming. 

Yet while our workers are feeling a sense of anxiety, distrust and contempt there is hope.

As I said in my opening, being in Government is all about choices and priorities.

Labor chooses all Australians, over the top end of town.

Labor prioritises funding an education system for the future, over tax cuts for multinationals and millionaires.

I’ll leave you with this: we all know that workers across the country are increasingly worried about their future But, I hope you all now know that a Shorten Labor Government knows this, we will do our best to stop this, and we will work with you all to deliver for all Australians.